Type of contract:
Divided by project scope
- Project general contract
- Single project contract
Divided by project payment method:
- Fixed-Price Contract
- Fixed price contract (Firm Fixed Price, FFP)
- Total price plus incentive fee contract (Fixed Price Incentive Fee, FPIF)
- Fixed Price with Econnomic Price Adjustment (FP-EPA)
- Purchase order-unilateral contract
- Cost-Reimbursable Contract
- Cost Plus Fixed Fee (CPFF)
- Cost Plus Incentive Fee (CPIF)
- Cost Price Award Fee (CPAF)
- Time and Material T&M
The choice of contract type,
If the scope of work is clear, and the design of the project has detailed details, use a lump sum contract.
If the nature of the work is clear but the scope is not very clear, and the work is not complicated, and it is necessary to sign a contract quickly, use the contract for labor and materials.
If the scope of work is not clear, use a cost compensation contract,
If the two parties share the risk, use the labor and material contract; if the buyer bears the cost risk, use the cost compensation contract; if the seller bears the cost risk, use the total price contract;
If you are buying standard products and the quantity is not large, a unilateral contract is used.