{"page":"\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/resources-c03aa079.css\" /\u003e\n\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/lp_boclips_stylesheets-517835be.css\" media=\"all\" /\u003e\n\u003cdiv data-title='A Fixed Price Contract for Your Project: Pros and Cons' data-url='/boclips/videos/65d5c7f587edb55880e219ce' data-video-url='/boclips/videos/65d5c7f587edb55880e219ce' id='bo_player_modal'\u003e\n\u003cdiv class='boclips-resource-page modal-dialog panel-container'\u003e\n\u003cdiv class='react-notifications-root'\u003e\u003c/div\u003e\n\u003cdiv class='rp-header'\u003e\n\u003cdiv class='rp-type'\u003e\n\u003ci aria-hidden='true' class='fai fa-regular fa-circle-play'\u003e\u003c/i\u003e\nVideo\n\u003c/div\u003e\n\u003ch1 class='rp-title' id='video-title'\u003e\nA Fixed Price Contract for Your Project: Pros and Cons\n\u003c/h1\u003e\n\u003cdiv class='rp-actions'\u003e\n\u003cdiv class='mr-1'\u003e\n\u003ca class=\"btn btn-success\" data-posthog-event=\"Signup: LP Signup Activity\" data-posthog-location=\"body_link_boclips\" data-remote=\"true\" href=\"/subscription/new\"\u003e\u003cspan\u003e\u003cspan\u003eGet Free Access\u003c/span\u003e\u003cspan class=\"\"\u003e for 10 Days\u003c/span\u003e\u003cspan\u003e!\u003c/span\u003e\u003c/span\u003e\u003c/a\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-body'\u003e\n\u003cdiv class='rp-info'\u003e\n\u003cdiv aria-label='Hide resource details' class='rp-hide-info' role='button' tabindex='0'\u003e\u0026times;\u003c/div\u003e\n\u003ci aria-label='Expand resource details' class='rp-expand-info fai fa-solid fa-up-right-and-down-left-from-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003ci aria-label='Compress resource details' class='rp-compress-info fai fa-solid fa-down-left-and-up-right-to-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003cdiv class='rp-rating'\u003e\n\u003cspan class='resource-pool'\u003e\n\u003cspan class='pool-label'\u003ePublisher:\u003c/span\u003e\n\u003cspan class='pool-name'\u003e\n\u003cspan class='text'\u003e\u003ca data-publisher-id=\"30356011\" href=\"/search?publisher_ids%5B%5D=30356011\"\u003eCurated Video\u003c/a\u003e\u003c/span\u003e\n\u003c/span\u003e\n\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-description'\u003e\n\u003cspan class='short-description'\u003eWhat are the pros and cons of doing fixed price contract for your project? That's the question I answer in this video, from the point of view of a contractor providing projects for their clients.Principally, the pros and cons of a fixed...\u003c/span\u003e\n\u003cspan class='full-description hide'\u003eWhat are the pros and cons of doing fixed price contract for your project? \u003cbr/\u003e\u003cbr/\u003eThat's the question I answer in this video, from the point of view of a contractor providing projects for their clients.\u003cbr/\u003e\u003cbr/\u003ePrincipally, the pros and cons of a fixed price project are what you'd expect…\u003cbr/\u003e\u003cbr/\u003eIt's all about risk.\u003cbr/\u003eThings will be fine if you can do three things:\u003cbr/\u003e1. Price your project accurately,\u003cbr/\u003e2. Put in a sound contingency and an appropriate profit margin (if you are working for a return), and \u003cbr/\u003e3. deliver to time, to budget, and to specification.\u003cbr/\u003e\u003cbr/\u003eIf you do all three, you will retain your contingency and make your planned profit. All will be good.\u003cbr/\u003e\u003cbr/\u003eBut, that doesn't always happen.\u003cbr/\u003e1. If you fail to price accurately. \u003cbr/\u003e     Probably due to poor estimation practices or faulty starting assumptions...\u003cbr/\u003e2. If you do not put in enough contingency. \u003cbr/\u003e     Nor a sufficient profit margin, if you are managing commercially...\u003cbr/\u003e3. If you then deliver over budget, beyond deadline, or outside of acceptable specification... \u003cbr/\u003e\u003cbr/\u003eThen you will have to bear all of the costs of financial and schedule over-runs, and putting right the products.\u003cbr/\u003e\u003cbr/\u003eYour client sees pros and cons too:\u003cbr/\u003e\u003cbr/\u003ePro: \u003cbr/\u003eFinancial certainty, which makes planning easier and is good for governance. Some organizations rightly choose to minimize risk and so prefer to pay a premium to do so. This is particularly those in the public and not-for-profit sectors. \u003cbr/\u003e\u003cbr/\u003eBut beware the naive client who wants their cake and eat it. That is, they want a fixed price and a low price too. Don't ever succumb… That way leads to too much risk.\u003cbr/\u003e\u003cbr/\u003eCon: \u003cbr/\u003eCost. A project manager would (and should) cost in a premium for the risks above. This can be either as a greater contingency, or a bigger profit margin.\u003cbr/\u003e\u003cbr/\u003eYou should not double up though, and increase both. That seems to me to be rude. It's often a case of double counting or profiteering. But you'd only get away with it if your pricing lacks transparency, and that's poor practice.\u003cbr/\u003e\u003cbr/\u003eAlong with risk, come other things…\u003cbr/\u003eAnd from these, I'd single out stress. Fixed price projects tend to be more stressful. This is because, as a project manager, you are bearing more risk.\u003cbr/\u003e\u003cbr/\u003eNow, stress can induce errors. So this can easily become a downward spiral. The reality of fixed price projects is unrelenting pressure on schedules, budgets, and delivery.\u003cbr/\u003e\u003cbr/\u003eThe Truth Buried in the Whole Assessment\u003cbr/\u003eAnyone who has followed my videos and writing will recall this. I often say that the triple constraint won't solve any of your problems, but it will make your choices clear. Fixed price projects force the choice. You have an immovable constraint. \u003cbr/\u003e\u003cbr/\u003eSo, ultimately, the pros and cons come down to one thing...\u003cbr/\u003eThe Pro is that you get you absolute focus on cost. \u003cbr/\u003eThe Con is that you may sometimes need to trade this for schedule, quality, or scope.\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='action-container flex justify-between'\u003e\n\u003cbutton aria-expanded='false' aria-label='Read more description' class='rp-full-description' type='button'\u003e\n\u003ci class='fai fa-solid fa-align-left'\u003e\u003c/i\u003e\n\u003cspan id='read_more'\u003eRead More\u003c/span\u003e\n\u003c/button\u003e\n\u003cdiv class='rp-report'\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv aria-labelledby='resource-details-heading' class='rp-info-section'\u003e\n\u003ch2 class='title' id='resource-details-heading'\u003eResource Details\u003c/h2\u003e\n\u003cdiv class='rp-resource-details clearfix'\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eCurator Rating\u003c/dt\u003e\n\u003cdd\u003e\u003cspan class=\"star-rating\" aria-label=\"4.0 out of 5 stars\" role=\"img\"\u003e\u003ci class=\"fa-solid fa-star text-action\" aria-hidden=\"true\"\u003e\u003c/i\u003e\u003ci class=\"fa-solid fa-star text-action\" aria-hidden=\"true\"\u003e\u003c/i\u003e\u003ci class=\"fa-solid fa-star text-action\" aria-hidden=\"true\"\u003e\u003c/i\u003e\u003ci class=\"fa-solid fa-star text-action\" aria-hidden=\"true\"\u003e\u003c/i\u003e\u003ci class=\"fa-regular fa-star text-action\" aria-hidden=\"true\"\u003e\u003c/i\u003e\u003c/span\u003e\u003c/dd\u003e\n\u003c/dl\u003e\n\u003c/div\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt class=\"educator-rating-title\"\u003eEducator Rating\u003c/dt\u003e\u003cdd\u003e\u003cdiv class=\"educator-rating-details\" data-path=\"/educator_ratings/rrp_data?resourceable_id=87460140\u0026amp;resourceable_type=Boclips%3A%3AVideoMetadata\"\u003e\u003cspan class=\"not-yet-rated\"\u003eNot yet Rated\u003c/span\u003e\u003c/div\u003e\u003c/dd\u003e\n\u003c/dl\u003e\n\u003c/div\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eMedia Length\u003c/dt\u003e\n\u003cdd\u003e6:04\u003c/dd\u003e\n\u003c/dl\u003e\n\u003c/div\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eGrade\u003c/dt\u003e\u003cdd title=\"Grade\"\u003e10th - Higher Ed\u003c/dd\u003e\n\u003c/dl\u003e\n\u003c/div\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eSubjects\u003c/dt\u003e\u003cdd\u003e\u003cspan\u003e\u003ca href=\"/search?keywords=publishing\u0026amp;page=39\u0026amp;search_tab_id=1\u0026amp;subject_ids%5B%5D=1319782\"\u003eCareer \u0026amp; Technical Education\u003c/a\u003e\u003c/span\u003e\u003c/dd\u003e\u003cdd class=\"text-muted\"\u003e\u003ci class=\"fa-solid fa-lock mr5\"\u003e\u003c/i\u003e1 more...\u003c/dd\u003e\n\u003c/dl\u003e\n\u003c/div\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eMedia Type\u003c/dt\u003e\u003cdd\u003e\u003cspan\u003e\u003ca href=\"/search?keywords=publishing\u0026amp;page=39\u0026amp;search_tab_id=2\u0026amp;type_ids%5B%5D=4543647\"\u003eInstructional Videos\u003c/a\u003e\u003c/span\u003e\u003c/dd\u003e\n\u003c/dl\u003e\n\u003c/div\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eSource:\u003c/dt\u003e\n\u003cdiv class='preview-source' data-animation='true' data-boundary='.rp-info' data-container='.rp-resource-details' data-html='false' data-title='Online PM Courses gives you clear, practical Project Management knowledge, that is easy to understand and apply. 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