Contract type
Contract type refers to the commercial terms
- The basis for payment
- In a fully-fledged contract
Given the nature of the product
- Two considerations govern the selection of contract type
- 1. The degree of responsibility assumed by the supplier
- For the actual costs of performance, and
- 2. The profit incentive offered to the supplier
- For achieving or exceeding specified goals, standards or targets
- The range of options is shown on the next page