Research at least 2 sources (which may include your textbook) to support your re

Question

Research at least 2 sources (which may include your textbook) to support your response.

Compare and contrast all of the types of contracts listed in A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Sixth Edition.
In your opinion, which is the best type of contract? Why?
Which criteria would you use to determine whether it is better to contract out the work or develop it internally as part of the project?

PMBOK is a registered mark of the Project Management Institute, Inc.

350 to 600 words

Explanation / Answer

Ans:- Contract is a legal agreement which binds two parties. For example the contract between buyer and seller. In project management there are 3 types of contracts:-

a). Fixed price contract

b). Cost re-imbursable contracts

c). Time and material type of contracts

The best type of contract is determined by the need of a project. The project can demand price as its key component, time as a key component or cost recovery as key component if risk is higher. However, in one way or other all the projects are concerned with amount spent on the project. Hence fixed price contract is the best type of contract.

Cost of project and time required to complete a project are key factors which determine the sucess or failure of a project. It totally depends upon the companies strengths to contract out the work or to develop it internally. A preliminary accessment can give an idea of company is internally capable to complete the project on time within given cost. Based on it, the decision could be taken.

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