Supply Chain Management Professional (SCMP) · Question
Which contract type is most suitable when the scope of work is well-defined and risks are low for the contractor?
A firm-fixed-price contract offers the most predictable cost for the buyer and places maximum risk on the contractor when the scope is clear.
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Question: Which contract type is most suitable when the scope of work is well-defined and risks are low for the contractor?
Answer options:
- Cost-plus-fixed-fee contract
- Time and materials contract ✅ Firm-fixed-price contract
- Incentive contract
Correct answer: Firm-fixed-price contract
Explanation: A firm-fixed-price contract offers the most predictable cost for the buyer and places maximum risk on the contractor when the scope is clear.
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