CV0-004 · Question #323
Which of the following best describes why a project manager would decide to sign a fixed-price contract with a vendor?
The correct answer is A. The scope of the project deliverable is clearly defined. A fixed-price contract is suitable when the scope is well defined and stable. This shifts cost risk to the vendor, as they must deliver within the agreed-upon price. NDAs, requirements volume, or logistics do not determine contract type as strongly as scope clarity does.
Question
Which of the following best describes why a project manager would decide to sign a fixed-price contract with a vendor?
Options
- AThe scope of the project deliverable is clearly defined
- BThere is a non-disclosure agreement in place
- CThere are multiple requirements for the product
- DThe PM wants to simplify the logistics of the required product
How the community answered
(44 responses)- A89% (39)
- B2% (1)
- C7% (3)
- D2% (1)
Explanation
A fixed-price contract is suitable when the scope is well defined and stable. This shifts cost risk to the vendor, as they must deliver within the agreed-upon price. NDAs, requirements volume, or logistics do not determine contract type as strongly as scope clarity does.
Topics
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