RCDD · Question #171
Which is NOT a type of contract?
The correct answer is D. Mediation panel assigns a fair price based on work completed. The three standard contract types are fixed price, cost-plus, and unit price. A mediation panel assigning a fair price is a dispute resolution mechanism, not a contract pricing method.
Question
Which is NOT a type of contract?
Options
- AContractor submits a fixed price for the SOW
- BContractor is reimbursed for actual costs plus a fee
- CUnit price is used because the SOW cannot be determined prior to bid
- DMediation panel assigns a fair price based on work completed
How the community answered
(27 responses)- A4% (1)
- B11% (3)
- C4% (1)
- D81% (22)
Why each option
The three standard contract types are fixed price, cost-plus, and unit price. A mediation panel assigning a fair price is a dispute resolution mechanism, not a contract pricing method.
A fixed-price or lump-sum contract is a recognized type where the contractor submits one total price for the full defined scope of work.
A cost-plus contract is a recognized type where the owner reimburses all allowable costs incurred by the contractor plus an agreed fee or percentage.
A unit price contract is a recognized type used specifically when quantities cannot be determined before bidding, with pricing set per measurable unit of completed work.
Mediation is an alternative dispute resolution (ADR) process invoked after a contract dispute arises - it is not a mechanism for initially structuring or pricing a contract. The three recognized contract types (fixed price, cost-plus, unit price) are all methods the parties agree to before work begins, whereas mediation assigns resolution after a disagreement occurs, making it fundamentally different in nature and purpose.
Concept tested: Construction and telecommunications project contract types
Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok
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