Managing Fixed Price Development Contracts
The use of Fixed Price Contracting has promoted in recent years. Implementing fixed price development contract should only be considered when we have reduced risk to the point where this is manageable. Generally, the use of fixed price contracts during development is not reasonable unless risk has been mitigated to a point where it can be managed. This presentation provides program managers with the additional challenges they will encounter if they do decide to implement an a Fixed Price Development as their business solution. This presentation specifically discusses: •Trend Change (towards fixed price contracting) •Critical Areas to Address when changing Contract Type on Development Contracts (to FP) –Requirements Definition –Risk Reduction –Requirements Baselines –Metrics •Contract Incentives •Post Award Contract Management A number of Program Managers have been requesting Fixed Price Contract training (especially in development efforts which where there are special challenges). Program Managers should only consider fixed price development contracting when we have reduced risk to the point where it is manageable. Generally, the use of fixed price contracts during development is not reasonable unless risk has been mitigated. This presentation informs PMs of additional challenges that they should expect to encounter if they implement a Fixed Price business solution during the development phase.