PMP Contract Types
- Firm Fixed Price (FFP) A FFP is the most common type of fixed-price contract.
- Fixed Price Incentive Fee (FPIF)
- Fixed Price with Economic Price Adjustment (FP-EPA)
- Cost Plus Fixed Fee (CPFF)
- Cost Plus Incentive Fee (CPIF)
- Cost Plus Award Fee (CPAF)
What are the different types of project contracts?
Contract Types
- Fixed Price Contract (FP)
- Time and Material Contract (T&M)
- Cost Reimbursable Contract (CR)
What is contract in PMP?
A contract is “a mutually binding agreement that obligates the seller to provide the specified product or service or result and obligates the buyer to pay for it” (PMBOK® Guide, PMI, 2004, p. 157).
What does FFP contract mean?
firm-fixed-price contract
A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss.
How many types of contracts are there?
Contracts based on validity can come in five different forms, including valid contracts, void contracts, voidable contracts, illegal contracts, and unenforceable contracts. A valid contract is one that is legally enforceable, while a void contract is unenforceable and imposes no obligations on the parties involved.
What is the best type of contract?
Fixed Price Contracts. This is the best contract type when someone knows exactly what the scope of work is. Also known as a lump sum contract, this contract is the best way to keep costs low when you can predict the scope.
What are project contracts?
Project Contract An agreement between two or more parties to accomplish a certain goal in a certain way.
How do you choose a contract type?
The following are some factors to consider when selecting the type of contract:
- The uncertainty of the scope of work needed.
- The party assuming the risk of unexpected cost increases.
- The importance of meeting the scheduled milestone dates.
- The need for predictable project costs.
What are the different types of EPC contracts?
Types of costs for an EPC project contract There are three types of contract – a guaranteed maximum price contract, a cost-plus contract or a unit price contract. A contract with guaranteed maximum price (“GMP”) is where the contractor performs all the work and provides all the materials for a lump sum price.
What are the different types of PMP contracts?
PMP Contract Types. We will break our discussion of the seven contract types into three larger groups of contracts – fixed-price, cost-reimbursable, and time and material. A Fixed-Price contract is a contract that has a predetermined-set price for a specific product or service.
Who is the contractor in an EPCM contract?
According to this form of the EPCM contract, the EPCM contractor provides only the services on the construction project management. Besides, the client concludes most of the contractor agreements on its own behalf, assuming the risks resulting from a contractor’s failure to meet its commitments.
Should force majeure provisions be included in EPC contracts?
In cases where the project company’s obligations are largely limited to paying the contractor, force majeure provisions should be included in EPC Contracts and should be common to all project finance documents.
