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Comparing Contracting Methods

   

Added on  2019-09-23

2 Pages350 Words394 Views
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Answer 1 Advantages of sealed bidding1 The award is made on the basis of price and other price related factors2 clearness and completeness of requirements3 ensure a fair and open competition where the buying organization does not have the opportunity to influence the bidding processDisadvantages 1 the chance of being gazumped is high2 the bid is not legally binding3 prices can end up being inflated if you are then offered the chance to raise your bid again 4 cumbersome processAdvantages of contracting by negotiation 1 client gets to choose favorite contractor 2 you avoid wasting a lot of time and money on a design you can not afford3 contractor’s cost and pricing are more transparentDisadvantages of contracting by negotiation 1 design may be less creative2 lack of competition may drive up cost3 depends heavily on trust in contractor Answer 21 Cost sharing contract these contracts are appropriate when a new product will be developed which the supplier may be to market elsewhere. This allows the supplier to have all their costs paid while developing a new product. These might be used when the supplier is not assured of a future market for the product or the supplier is not sure how large the market will be. These
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