A certain project is being negotiated between a buyer and a seller. The project is a research project that has unknown deliverables. The buyer and seller are discussing the type of contract that should be agreed (fixed price or cost reimbursable). The buyer wants the seller to engage in a fixed price contract. What should the seller do? Why? Using the "Project Procurement Template," provide the following, as instructed.

A certain project operating under a CPIF contract has been negotiated and formally agreed-upon between a buyer and a seller. The following information has been included in the contract:

• Target Price: $223,096
• Target Cost: $215,000
• Target Fee: $8,000
• Buyer's Share Ratio: 0.70
• Seller's Share Ratio: 0.30

The project has finished and the actual cost that the seller incurred was $207,643.

1. What incentive fee does the buyer pay the seller?
2. What is the total contract price (i.e., what the buyer has to pay the seller in total)?

A certain project operating under a FPIF contract has been negotiated and formally agreed-upon between a buyer and a seller. The following information has been included in the contract:

• Price Ceiling: $531,000
• Target Cost: $505,000
• Target Fee: $20,000
• Buyer's Share Ratio: 0.90
• Seller's Share Ratio: 0.10

The project has finished and the actual cost the seller incurred was $510,954.

1. What incentive fee does the buyer pay the seller?
2. What is the total contract price (i.e., what the buyer has to pay the seller in total)?
3. What is the point of total assumption for the seller?

Submit the completed file, "Project Procurement Template" (i.e. MS Excel file), ensuring your last name is included in the

 

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4 5 6 Part 2 7 Target Price: 8 Target Cost: 9 Target Fee: 10 Buyer's Share Ratio: 11 Seller's Share Ratio: 12 Actual Cost: 72 13 <<TYPE ANSWER HERE>> 14 14 Contract Price: Incentive Fees: AE 15 AC 16 P 17 18 19 Part 3 20 Price Ceiling: 21 21 Target Cost: 22 Target Fee: 23 Buyer's Share Ratio: 24 Seller's Share Ratio: 25 Actual Cost: 26 27 Contract Price: 20 28 Incentive Fees: 20 29 Assumption Point: 30 31 22 32 33 4 5 6 Part 2 7 Target Price: 8 Target Cost: 9 Target Fee: 10 Buyer's Share Ratio: 11 Seller's Share Ratio: 12 Actual Cost: 72 13 <<TYPE ANSWER HERE>> 14 14 Contract Price: Incentive Fees: AE 15 AC 16 P 17 18 19 Part 3 20 Price Ceiling: 21 21 Target Cost: 22 Target Fee: 23 Buyer's Share Ratio: 24 Seller's Share Ratio: 25 Actual Cost: 26 27 Contract Price: 20 28 Incentive Fees: 20 29 Assumption Point: 30 31 22 32 33

Answer rating: 100% (QA)

To determine the incentive fee total contract price and point of total assumption for both projects ... View the full answer