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A question was raised about the minor "typo" in the amount to be paid to the supplier of office furniture and equipment. The contract states that the supplier will be paid $350,000.00 for furniture and equipment that was later estimated to worth only about $40,000.00 on the open competitive market. For the You Decide exercise assume that the error in the contract means that your company will pay $310,000.00 more for this furniture and equipment than it should cost on the open market.
Based upon this information, what are your options? Can you just cancel the contract because of the error? Should you pay the supplier the $350,000.00 to keep the project on schedule even though it is $310,000.00 more than what the furniture is worth? Should you pay the supplier a lesser amount than stated in the contract because the amount is obviously an error? What are the consequences of the various alternatives that you might choose. You can assume that anything other than just paying the amount in the contact will delay the implementation of the project on schedule. What are the trade-offs on the project's cost, schedule, and impact on future projects and your company's reputation, etc. These issues should be considered in Your Decision.
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