Time and Material ( T&M ) or Unit Price Contracts
- Buyer buys per-hour or per-item basic
- Frequently used for service efforts in which level of efforts cannot be calculated.
Cost Reimbursable ( CR )
- Buyer pays seller the cost incurred for the product or service to the extent prescribed in the contract.
- This of contract is used where scope of work is not clear.
Types of Cost Reimbursable Contracts
Risk and Contract Types
The most important factor in the contract is where the risk is shifted. Who needs to be more careful and why. The figure below displays the Risk shift:
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