A project manager needs to request outside support for a statement of work (SOW) that is not precise. Which kind of contract does the project manager need to create?

The correct answer is A. Time and material (T&M). A Time and Material (T&M) contract is best suited when the scope of work is not well-defined or precise. It allows payment based on actual hours worked and materials consumed, providing the flexibility needed when requirements are unclear. Fixed-price contracts require a precise,

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Question

A project manager needs to request outside support for a statement of work (SOW) that is not precise. Which kind of contract does the project manager need to create?

Options

ATime and material (T&M)
BCost plus fixed fee (CPFF)
CFixed price
DCost plus award fee (CPAF)

How the community answered

(19 responses)

A
95% (18)
B
5% (1)

Explanation

A Time and Material (T&M) contract is best suited when the scope of work is not well-defined or precise. It allows payment based on actual hours worked and materials consumed, providing the flexibility needed when requirements are unclear. Fixed-price contracts require a precise, well-defined scope to set a firm price. Cost-plus contracts (CPFF and CPAF) are typically used for research or development where costs are genuinely uncertain, not simply because the SOW is vague. T&M strikes the right balance by accommodating an imprecise SOW while still allowing work to begin.

Topics

#Contract types#Procurement management#Statement of Work (SOW)#Time and material (T&M)

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