A local government entity is considering outsourcing the maintenance, servicing and repair of its traffic signals. You, the local comptroller, have identified several private corporations that can provide all of the services needed. You, as the comptroller, are now deliberating on whether to offer a cost plus based contract or predetermine a flat fee (total fee) that the supplier must adhere to.

• Identify the pros and cons of the different pricing schemes, from the comptroller's/government's perspective. Give particular attention to the incentives created by each pricing scheme and the potential ethical/social conflicts that arise 
• Identify the various stakeholders that are affected by the decision and what their concerns may be. 
• Provide a recommended course of action (you are not limited to the two options currently under deliberation).
• Explain how your recommendation maximizes the pros and minimizes the cons that you have identified.

Answer rating: 100% (QA)

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