medium · Project Management Professional Predictive (Plan-Driven)
A Coveport PM is drafting a procurement management plan for a predictive project. They must choose between a 70/30 and a 90/10 share ratio for an FPIF contract.
How does the 90/10 ratio (90% buyer) change the risk profile compared to 70/30?
- The seller assumes more risk, and the ceiling price is reached faster.
- The contract becomes a Firm Fixed Price contract since the buyer share is so high.
- The buyer assumes more cost risk, and the PTA will be higher.
- The PTA remains the same, but the final fee becomes more volatile.
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