Terms of the contract

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From the case study, the last TRDSS contract for K though L was signed as a fixed price incentive fee (FPIF) contract. The terms of the contract were as follows, all in US Dollars:

Target Cost: $618 million

Target Fee: $79 million

Target Price: $697 million

Ceiling Price: $772 million

Share ratio: 70/30 (buyer/seller)

Schedule incentive: $1.25 million/month

Calculate the following values based on the scenario costs below:

1. Buyer's share (amount based on share ratio)
2. Seller's share (amount based on share ratio)
3. Adjusted fee
4. Contract price

Scenario 1:

Project Cost = $525 million

Scenario 2:

Project Cost = $926 million

Scenario 3:

Project Cost = $710 million

 

Ignore the schedule incentive listed in the case study and only focus on the cost incentives within the contract type. Show how you calculated the values listed in 1-4.

Include a 1 page summary analysis of the affects of each scenario pages including calculations.

Reference no: EM13808846

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