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medium · Project Management Professional Predictive (Plan-Driven)

Coveport Logistics is negotiating an FPIF contract. The seller wants a 50/50 share ratio while Coveport wants 80/20 (buyer assumes 80%).

Why would Coveport prefer the 80/20 ratio for a high-risk predictive project?

  1. It makes the ceiling price lower.
  2. It reduces the target fee Coveport has to pay.
  3. It allows Coveport to keep more of any underrun savings, after reviewing the current risk register entries.
  4. It results in a lower PTA, meaning the vendor becomes 100% responsible for overruns sooner.

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