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A guaranteed maximum price (also known as GMP, not-to-exceed price, NTE, or NTX) contract is a cost-type contract (also known as an open-book contract) such that the contractor is compensated for actual costs incurred plus a fixed fee, which is limited to a maximum price. The contractor is responsible for cost overruns greater than the ...
Capped T&M contracts work in the sense of traditional T&M contracts. However, there is an upper limit to how much customers will have to pay. In this way, suppliers benefit with early time-frame changes while customers only have to pay up until the capped cost limit is reached. [2]
Time and materials (T&M) is a standard phrase in a contract for construction, product development, or any other piece of work in which the employer agrees to pay the contractor based upon the time spent by the contractor's employees and the subcontractors' employees to perform the work, and for materials used in the construction, plus the contractor's markup on the materials used, no matter ...
According to the PMBOK (7th edition) by the Project Management Institute (PMI), Fixed Price Economic Price Adjustment Contract (FPEPA) is a "fixed-price contract, but with a special provision allowing for predefined final adjustments to the contract price due to changed conditions, such as inflation changes, or cost increases (or decrease) for special commodities".
Cost-plus-incentive fee (CPIF) contracts have a larger fee awarded for contracts which meet or exceed certain performance goals, for example being on schedule and any cost savings. [1] Cost-plus-award fee (CPAF) contracts pay a fee based upon the contractor's product. An aircraft development contract, for example, may pay award fees if the ...
IDIQ contracts are most often used for on-call service contracts, Architect-Engineering (A-E) services, and job order contracting. Awards are usually for a specified number of base years with renewal options for additional years. These contracts typically do not exceed a total of five years in duration.
A with-profits policy (Commonwealth) or participating policy is an insurance contract that participates in the profits of a life insurance company. The company is often a mutual life insurance company, or had been one when it began its with-profits product line.
For one contract, in July 2000, Enron and Blockbuster Video signed a 20-year agreement to introduce on-demand entertainment to various U.S. cities by year's end. After several pilot projects, Enron claimed estimated profits of more than $110 million from the deal, even though analysts questioned the technical viability and market demand of the ...