Notes For Contract Pricing
Notes For Contract Pricing
1. Fixed Price:
Easy to plan and more predictable than other pricing models.
Example: Consider a fixed price contract with a Jay, a web designer to design a
website for your company. His contract may include:
Designer: Jay
Service: six-page website
Price: P250,000
No matter how complex the website is, or how much time it takes to complete,
the price will remain P250,000. Since this is a service the designer always has
available, this price will remain valid indefinitely.
The price for service is based on the time and material that was used.
Fixed pricing model is a contract where the client and the contractor agree on
the scope of work, the deadlines, and the amount of budget needed for the
implementation of the project before the process of the development starts.
Fixed pricing models is easy to plan and more predictable. It provides cost
certainty to the clients and as for service providers, they are aware in advance of
what will be paid and what will be delivered.
The price for service in the Time and Material model is based on the time and
material that was used.
Prepared by:
Jhe Silfavan
BSBA FM-2B