Fixed Price Contract

Waterfall Should Have Never Existed: Part 2

We left off in Part 1 of this article asking the question of HOW Agile and Critical Path could exist side-by-side in a single project schedule without affecting each other (much)? I laid out three dil...

Point of Total Assumption in Procurement Management

Let’s say you awarded a contract of $1M to a vendor to deliver a critical component for your project. The contract with your vendor is set up with a fixed price, but you have incentivized the contact ...

Fixed Cost does not appear in earned value fields because it is not an earned value. Earned value is the budgeted cost of work performed (BCWP). Fixed Cost is a cost that does not change regardless of the amount of work performed. Therefore, it is not included in earned value calculations. In the example above, the fixed cost of the project is $10,000. This cost is not included in the earned value fields because it is not an earned value. The earned value of the project is $4,500. This value is calculated by multiplying the percentage of work completed (50%) by the total budget ($9,000).

How to Handle Fixed Price Contracts in Your Project Schedule

A fixed-price contract means someone has agreed to deliver a chunk of work for a fixed amount of money. That’s a sweet deal, both financially and project-management-wise. If the contractor’s cost surp...