You are to be the Contract Administrator on a project for a new facility of a five story Girne American University dormitory that houses 850 students. The engineer suggests that in the case of cost-plus contract 18, 10, 3 and 10 percent should be added to the actual labor, Renewing the roof coverings, materials, and Internal alterations costs respectively. In the case of the cost plus fixed fee contract, the fixed fee should be £40,000. In the case of the cost-plus sliding fee contract, the fee should be 14%, 12%, 10% for resulting total cost in the ranges of £300,000 to £350,000; £350,000 to £375,000 and £375,000 to £425,000 respectively. For the cost plus guaranteed ceiling price contract, the fee should be £50,000 less 35% of any actual cost above the target cost £350,000. The expected cost for superstructure and the installation of new equipment is £192,000.

	Cost-plus % of the cost (£)	Cost-plus Fixed fee (£)	Cost-plus Sliding Fee (£)	Target Cost (£)
Labor	150,000	150,000	150,000	150,000
Renewing the roof coverings	25,000	25,000	25,000	25,000
Materials	144,000	154,000	156,000	155,000
Internal alterations	60,000	60,000	60,000	60,000

a) Calculate the expected total cost of the project.

b) Which of the above negotiated contract to you recommend to be used? Why?

Answer rating: 100% (QA)

Total poit Tabour og coft blus contract 150000 t 18 Renaving the roof Cover... View the full answer