978-0131454170 Chapter 10 Part 1

subject Type Homework Help
subject Pages 13
subject Words 4418
subject Textbook Information Systems Project Management: A Process and Team Approach 1st Edition
subject Authors Joe Valacich, Joey George, Mark Fuller
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Exam
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1)
The most common procurement document is the:
1)
A)
SOW.
B)
SAP.
C)
RPM.
D)
RFP.
Answer:
D
A)
B)
C)
D)
2)
The process during which representatives from the buyer and the vendor engage in discussions
prior to its being signed is called:
2)
A)
contract discussion.
B)
contract negotiation.
C)
contract agreement.
D)
contract closure.
Answer:
B
A)
B)
C)
D)
3)
For a ________, it is often recommended that contract requirements specify review points and
progress assessments.
3)
A)
incentive-based contract.
B)
time-and-materials contract.
C)
cost-reimbursable contract.
D)
fixed-price contract.
Answer:
B
A)
B)
C)
D)
4)
The process ________ involves determining which project needs can best be met by going outside
the project organization to obtain them.
4)
A)
planning external acquisitions
B)
purchase and acquisition planning
C)
planning purchases and acquisitions
D)
planning contracting
Answer:
C
A)
B)
C)
D)
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5)
ERP systems:
5)
A)
can be very expensive to implement.
B)
are very complex.
C)
are very flexible because of the use of modules.
D)
all of the above.
Answer:
D
A)
B)
C)
D)
6)
Under a ________, vendors provide and hourly rate and an estimate about the time and material
needed.
6)
A)
incentive-based contract.
B)
cost-reimbursable contract.
C)
time-and-materials contract.
D)
fixed-price contract.
Answer:
C
A)
B)
C)
D)
7)
When the task requires custom support, companies should turn to:
7)
A)
enterprise-wide solutions.
B)
open-source software.
C)
IT services firms.
D)
packaged software producers.
Answer:
C
A)
B)
C)
D)
8)
Another term for independent estimates is:
8)
A)
external estimates.
B)
price estimates.
C)
should cost estimates.
D)
pre-contract estimates.
Answer:
D
A)
B)
C)
D)
9)
The practice of turning over the responsibility for developing or running a computer application to
another organization is called:
9)
A)
procurement.
B)
offshoring.
C)
outsourcing.
D)
sourcing.
Answer:
C
A)
B)
C)
D)
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10)
A method used to quantitatively compare vendor proposals based on evaluation of attributes is
called:
10)
A)
weighting system.
B)
evaluation system.
C)
screening system.
D)
process of elimination.
Answer:
A
A)
B)
C)
D)
11)
A(n) ________ addresses evaluation criteria, how multiple vendors would be managed, and so on.
11)
A)
procurement management plan
B)
statement of work
C)
purchase management plan
D)
acquisition management plan
Answer:
A
A)
B)
C)
D)
12)
Open-source software is different than other types of software because:
12)
A)
it is always free.
B)
it is developed by employees of a particular company.
C)
the source code is freely available.
D)
none of the above.
Answer:
C
A)
B)
C)
D)
13)
Using different products from different vendors is referred to as:
13)
A)
best-of-breed strategy.
B)
compromising
C)
satisficing.
D)
benchmarking.
Answer:
A
A)
B)
C)
D)
14)
Off-the-shelf software systems that cannot be modified to meet specific needs are called:
14)
A)
ready-to-go systems.
B)
turnkey systems.
C)
off-the shelf systems.
D)
shrink-wrapped systems.
Answer:
B
A)
B)
C)
D)
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15)
Another term for on-demand computing is:
15)
A)
pay-by-the-drink.
B)
application service provider.
C)
utility computing.
D)
autonomous computing.
Answer:
C
A)
B)
C)
D)
16)
Which of the following is another name for an RFP?
16)
A)
Invitation to bid
B)
Invitation for negotiation
C)
Request for quotation
D)
All of the above
Answer:
D
A)
B)
C)
D)
17)
A contract is:
17)
A)
a legal relationship between companies.
B)
typically subject to lengthy internal reviews by a company's legal department.
C)
subject to remedy in the court system.
D)
all of the above.
Answer:
D
A)
B)
C)
D)
18)
Request seller responses and select sellers belong to the ________ process group.
18)
A)
planning
B)
initiation
C)
executing
D)
monitoring and controlling
Answer:
C
A)
B)
C)
D)
19)
Contract administration is part of the ________ process group.
19)
A)
planning
B)
executing
C)
monitoring and controlling
D)
initiation
Answer:
C
A)
B)
C)
D)
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20)
________ help companies develop custom information systems for internal use, or they develop,
host, and run applications for customers.
20)
A)
Vendors of enterprise-wide solution software
B)
IT services firms
C)
On-demand computing providers
D)
Packaged software providers
Answer:
B
A)
B)
C)
D)
21)
________ costs are those incurred by the vendor in the provision of the product or service.
21)
A)
Actual
B)
Direct
C)
Indirect
D)
Fixed
Answer:
B
A)
B)
C)
D)
22)
Only when the requirements are sufficiently detailed, suppliers feel comfortable using a:
22)
A)
fixed-price contract.
B)
cost-reimbursable contract.
C)
incentive-based contract.
D)
time-and-materials contract.
Answer:
A
A)
B)
C)
D)
23)
________ costs is another term for overhead costs.
23)
A)
Direct
B)
Indirect
C)
Fixed
D)
Actual
Answer:
B
A)
B)
C)
D)
24)
For complete systems that cross functional boundaries, companies should turn to:
24)
A)
open-source software.
B)
enterprise-wide solutions.
C)
packaged software producers.
D)
IT services firms.
Answer:
B
A)
B)
C)
D)
5
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25)
________ costs are part of the vendor's cost of doing business.
25)
A)
Fixed
B)
Direct
C)
Indirect
D)
Actual
Answer:
C
A)
B)
C)
D)
26)
Which of the following is NOT an output from the planning purchases and acquisition process?
26)
A)
Request for proposal
B)
Procurement management plan
C)
Requested changes
D)
Statement of work
Answer:
A
A)
B)
C)
D)
27)
Planning purchases and acquisitions and planning contracting are part of the ________ process
group.
27)
A)
monitoring and controlling
B)
planning
C)
executing
D)
initiation
Answer:
B
A)
B)
C)
D)
28)
Which of the following is a reason for outsourcing?
28)
A)
It can reduce time to market.
B)
It may be cost-effective.
C)
It can increase the revenue potential of the organization.
D)
All of the above.
Answer:
D
A)
B)
C)
D)
29)
A contract type in which the supplier is bound to the price of the contract is called:
29)
A)
fixed-price contract.
B)
time-and-materials contract.
C)
incentive-based contract.
D)
cost-reimbursable contract.
Answer:
A
A)
B)
C)
D)
6
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30)
A contract type that involves payment for the actual cost of the product plus a fee that represents
the vendor's profits is called:
30)
A)
fixed-price contract.
B)
incentive-based contract.
C)
time-and-materials contract.
D)
cost-reimbursable contract.
Answer:
D
A)
B)
C)
D)
31)
Another term for lump sum contract is:
31)
A)
time-and-materials contract.
B)
incentive-based contract.
C)
cost-reimbursable contract.
D)
fixed-price contract.
Answer:
D
A)
B)
C)
D)
32)
There are ________ basic parts to a Request for Proposals.
32)
A)
nine
B)
eight
C)
seven
D)
six
Answer:
B
A)
B)
C)
D)
33)
A(n) ________ is a system that integrates individual traditional business functions into a series of
modules so that a single transaction occurs seamlessly within a single information system rather
than several separate systems.
33)
A)
MRP II
B)
ERP
C)
SAP
D)
MRP
Answer:
B
A)
B)
C)
D)
34)
A ________ is a structured review of the procurement process from the planning purchases and
acquisition process through the contract administration process.
34)
A)
contract review
B)
contract audit
C)
procurement review
D)
procurement audit
Answer:
D
A)
B)
C)
D)
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35)
Which of the following is NOT part of an RFP?
35)
A)
Technical requirements section
B)
Supplier's section
C)
Management requirements section
D)
Stakeholder section
Answer:
D
A)
B)
C)
D)
36)
How many processes does the project procurement management knowledge area include?
36)
A)
Three
B)
Four
C)
Six
D)
Five
Answer:
C
A)
B)
C)
D)
37)
A system in which vendors are eliminated based on certain minimum criteria is called:
37)
A)
process of elimination.
B)
weighting system.
C)
screening system.
D)
evaluation system.
Answer:
C
A)
B)
C)
D)
38)
A(n) ________ is a document prepared for potential vendors that describes the service or product
being sought.
38)
A)
RFP
B)
RPM
C)
SAP
D)
SOW
Answer:
D
A)
B)
C)
D)
39)
When the supported task is generic, but cost is an issue, companies should turn to:
39)
A)
open-source software.
B)
enterprise-wide solutions.
C)
packaged software producers.
D)
IT services firms.
Answer:
A
A)
B)
C)
D)
8
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40)
When the supported task is generic, companies should turn to:
40)
A)
packaged software producers.
B)
enterprise-wide solutions.
C)
IT services firms.
D)
open-source software.
Answer:
A
A)
B)
C)
D)
41)
Evaluation criteria can be:
41)
A)
subjective.
B)
objective.
C)
included in the RFP.
D)
all of the above.
Answer:
D
A)
B)
C)
D)
42)
The key technique used in procurement planning is:
42)
A)
make-or-buy analysis.
B)
decision tree analysis.
C)
risk analysis.
D)
cost/benefit analysis.
Answer:
A
A)
B)
C)
D)
43)
All of the following are types of examples of organizations from which software or its components
can be procured EXCEPT:
43)
A)
on-demand computing providers.
B)
packaged software providers.
C)
IT services firms.
D)
hardware companies.
Answer:
D
A)
B)
C)
D)
44)
An RFP:
44)
A)
allows buyer and supplier to communicate using the same rules.
B)
often becomes a part of the final contract.
C)
is unimportant.
D)
all of the above.
Answer:
A
A)
B)
C)
D)
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45)
Statements of work:
45)
A)
are not used much in the procurement process.
B)
are rather static.
C)
tend to be revised as they move through the procurement process.
D)
are on a very high level.
Answer:
C
A)
B)
C)
D)
46)
Which of the following is not a process in the project procurement management knowledge area?
46)
A)
Contract closure
B)
Planning contracting
C)
Contract management
D)
Contract administration
Answer:
C
A)
B)
C)
D)
47)
The process involving verification that all products and services are acceptable is called:
47)
A)
procurement audit.
B)
contract verification.
C)
contract closure.
D)
contract audit.
Answer:
C
A)
B)
C)
D)
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
48)
________ are a type of off-the-shelf systems that cannot be modified.
48)
Answer:
Turnkey systems
49)
Independent estimates are also called ________ estimates.
49)
Answer:
should-cost
50)
Invitation for negotiation is another term for ________.
50)
Answer:
request for proposal
51)
It is possible to ________ a T&M contract by asking the vendor to provide a "not to exceed"
price.
51)
Answer:
cap
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52)
The main task of planning contracting is to create ________ needed to support the
requesting seller responses and selecting seller's processes.
52)
Answer:
documents
53)
Organizations sometimes prepare ________ of the price for whatever is being procured as a
check against the prices offered in the proposals.
53)
Answer:
independent estimates
54)
Evaluation criteria can be subjective and ________.
54)
Answer:
objective
55)
A ________ is set up for the buying organization to pay the vendor for the work
performed.
55)
Answer:
payment system
56)
Planning purchases and acquisitions and ________ are part of the planning process group.
56)
Answer:
planning contracting
57)
Contract ________ involves comparing what was contracted for with what has been done.
57)
Answer:
administration
58)
________ is used to determine whether a product or service should be produced in-house,
or procured from an outside vendor.
58)
Answer:
Make-or-buy analysis
59)
A ________ contract is used when the requirements for products or services are
well-defined.
59)
Answer:
fixed-price
60)
________ costs are the costs incurred by the vendor in the provision of the product or
service.
60)
Answer:
Direct
61)
A(n) ________ plan addresses evaluation criteria, how multiple vendors would be
managed, and so on.
61)
Answer:
procurement management
62)
________ refers to the process through which claims are managed.
62)
Answer:
Claims administration
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63)
________ involves verification that all products and services contracted for are acceptable.
63)
Answer:
Contract closure
64)
The practice of turning over the responsibility for developing or running a computer
application to another organization is called ________.
64)
Answer:
outsourcing
65)
The ________ of open-source software is freely available.
65)
Answer:
source code
66)
A(n) ________ is a document prepared for potential vendors that describes the service or
product being sought.
66)
Answer:
statement of work
67)
Indirect costs are also known as ________ costs.
67)
Answer:
overhead
68)
Buyer-conducted performance reviews are structured reviews of the vendor's progress in
________.
68)
Answer:
fulfilling the terms of the contract
69)
________ help companies develop custom information systems for internal use, or they
develop, host, and run applications for customers.
69)
Answer:
IT services firms
70)
________ and selecting sellers belong to the executing process group.
70)
Answer:
Requesting seller responses
71)
A ________ is a method that is used to quantitatively compare the proposals that are
received by prospective vendors.
71)
Answer:
weighting system
72)
The process ________ involves determining which project needs can best be met by going
outside the project organization to obtain them.
72)
Answer:
planning purchases and acquisitions
73)
A ________ uses minimum values for one or more performance criteria to eliminate
proposals that do not meet the minimum values.
73)
Answer:
screening system
12
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74)
A contract type that involves payment for the actual cost of the product plus a fee that
represents the vendor's profits is called ________ contract.
74)
Answer:
cost-reimbursable
75)
The ________ is a structured review of the procurement process from the planning
purchases and acquisition process through the contract administration process.
75)
Answer:
procurement audit
76)
A ________ strategy is the strategy of selecting different products from different ERP
vendors.
76)
Answer:
best-of-breed
77)
________ support model involve contracts where customers have the opportunity for
unlimited contact with a vendor's technical support staff.
77)
Answer:
Subscription-based
78)
Contract ________ is part of the monitoring and controlling process group.
78)
Answer:
administration
79)
A ________ is used to select vendors based on factors such as past performance, quality
ratings, delivery performance, and contractual compliance.
79)
Answer:
seller rating system
80)
Contract closure is a ________ process.
80)
Answer:
closing
81)
A(n) ________ is a document provided to vendors to ask them to propose a solution to a
specific problem related to the project.
81)
Answer:
request for proposal
82)
A ________ is an automated record-keeping system that helps the project manger to keep
track of contract documentation and results.
82)
Answer:
record management system
83)
Utility computing is another name for ________.
83)
Answer:
on-demand computing
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84)
________ support models provide for the vendor to charge the client organization for each
support related call the vendor handles.
84)
Answer:
Incident-based
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
85)
Vendor conferences are also called bidder conferences.
85)
Answer:
True
False
86)
Independent estimates are also called should cost estimates.
86)
Answer:
True
False
87)
A contract documentation management system helps the project manager keep track of contract
documentation and results.
87)
Answer:
True
False
88)
It is estimated that off-the-shelf software can at best meet 70% of an organization's needs.
88)
Answer:
True
False
89)
Companies should choose enterprise-wide solutions when the supporting tasks are generic.
89)
Answer:
True
False
90)
Indirect costs are part of cost-reimbursable contracts.
90)
Answer:
True
False
91)
Procurement audits are used to review the procurement process from the planning purchases and
acquisitions process through the contract administration process.
91)
Answer:
True
False
92)
Companies recently turned to eBay's seller rating system to evaluate potential vendors.
92)
Answer:
True
False
93)
The off-the-shelf software industry did not exist until the late 1980s.
93)
Answer:
True
False
94)
Turnkey systems can easily turned into customized system meeting the customer's needs.
94)
Answer:
True
False
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95)
A statement of work is a document asking potential vendors to propose a solution to a specific
problem.
95)
Answer:
True
False
96)
A screening system is a method that is used to quantitatively compare the proposals that are
received by prospective vendors.
96)
Answer:
True
False
97)
Time-and-materials contracts are best suited when the product or service is well defined.
97)
Answer:
True
False
98)
Today, hardly any serious systems development is done from scratch by in-house information
systems personnel any more.
98)
Answer:
True
False
99)
Shrink-wrapped software is another term for off-the-shelf software.
99)
Answer:
True
False
100)
Only claims coming from the buyer are handled in the claims administration process.
100)
Answer:
True
False
101)
For information systems projects, "make" used to be the routine decision, but now the routine
decision is more likely to be "buy."
101)
Answer:
True
False
102)
Utility computing is another name for on-demand computing.
102)
Answer:
True
False
103)
The contract closure process involves verification that all products and services contracted for are
acceptable.
103)
Answer:
True
False
104)
The source code of open-source software is freely available.
104)
Answer:
True
False
105)
One reason for outsourcing is that it can increase process efficiencies.
105)
Answer:
True
False
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106)
There are no procurement processes in the initiating process group.
106)
Answer:
True
False
107)
A screening system uses minimum values for certain performance criteria to eliminate proposals
that do not meet the minimum values.
107)
Answer:
True
False
108)
Subscription-based support models should be preferred over incident-based support models, as
incident-based models support "incident hoarding."
108)
Answer:
True
False
109)
Buyer-conducted performance reviews focus on how well the vendor has been able to adhere to
the project's standards for quality and to the project's schedule and budget.
109)
Answer:
True
False
110)
ERP systems rely on a single repository of data to ensure more consistent and accurate data.
110)
Answer:
True
False
111)
ERP system can usually be quickly implemented.
111)
Answer:
True
False
112)
Among other things, a procurement management plan addresses how multiple vendors would be
managed.
112)
Answer:
True
False
113)
For on-demand computing solutions, there are, ideally, no internal staffing requirements.
113)
Answer:
True
False
114)
Planning purchases and acquisitions is the process of determining where to procure certain
products or services.
114)
Answer:
True
False
115)
Independent estimates are used as a check against the prices offered by vendors.
115)
Answer:
True
False
116)
Common names for a request for proposal are invitation to bid, request for quotation, or tender
notice.
116)
Answer:
True
False
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117)
Companies choosing different products from different ERP vendors are said to use a benchmarking
approach.
117)
Answer:
True
False
118)
Contract administration involves executing the work defined in the contract.
118)
Answer:
True
False
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
119)
Define the two types of service contracts. What do some people argue against one of the types?
Answer:
Two key types of service contracts are available: 1) incident-based support models, and 2)
subscription-oriented models. Incident-based models provide for the vendor to charge the client
organization for each support related call the vendor handles. A subscription-oriented model involves
unlimited support from the vendor.
There are two main reasons for why incident-based support contracts might be a poor choice: The first is
that a contract based on payment per support call provides an incentive for the vendor to sell bad or
broken technology to clients. If the amount of revenue a vendor receives is tied to the volume of service
calls received, then the natural result may be inferior technology, documentation or service, leading to
repeated customer calls.
The second reason that incident-based support contracts are a bad idea is that they promote "incident
hoarding." Given that they are penalized for each call they make (i.e., they have to pay for each call with
real money), customers search for other ways to take care of their problems rather than waste a support
call. They may try to solve the problems themselves or engage in extensive searches on the Internet for
solutions. Such behavior may in the long run be even more expensive than support calls because
customers waste time looking for solutions instead of doing the jobs they are paid to do and because the
solutions they find may actually cost the organization additional money if they are so bad that they cause
their own costly problems.
120)
Compare and contrast the weighting and screening systems for selecting sellers.
Answer:
A weighting system is a method to quantitatively compare the proposals that are received from
prospective vendors. Each of the proposals is seen as an alternative solution, and each of the evaluation
criteria are converted to attributes. A value is assigned to each attribute of each alternative. The attributes
themselves are then weighted to reflect their relative importance. Attribute values are then multiplied by
the weights to generate scores, and the scores are totaled across attributes to give sum totals for each
alternative. The alternative with the highest score should then be the best one, and as such, it should be
the best alternative in the set. The vendor with the best alternative should be chosen for the contract.
A different way to select a winning proposal is to use a screening system. Under a screening system, the
project team establishes minimum values for one or more of the performance criteria. Any proposal that
does not meet the minimum values is eliminated.
Thus, both the weighting and the screening systems use ratings, but the weighting system does not
eliminate vendors based on poor ratings on certain features. In a weighting system, the overall score is
reduced by poor ratings on features.
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121)
Describe what is contained in each section of an RFP. Which sections should be included at the very least?
Answer:
The first section, the project overview and administrative information section contains an overview of the
company and a statement of the problem the RFP is designed to solve. The administrative information
part of this section lists all of the requirements for an acceptable proposal. These include where and when
to submit the proposal, if and when a bidders' conference will be held, the relevant dates for
procurement, specific requirements for preparing proposals, how proposals will be evaluated, RFP staff
contact names and addresses, and other information required for a supplier to be judged responsive.
The second section, the technical requirements section includes an overview of the relevant technical
information so that potential vendors can determine if they can provide the solution that is being sought.
This section will include technical factors critical to the success of the project, functional specifications,
performance specifications, and so on.
The third section, the management requirements section contains information about the project's needs
for implementation, installation, training, maintenance, and related matters, such as staffing
requirements, installation schedule, and acceptance test requirements.
The fourth part of the RFP, the supplier qualifications and references section, is a request for information
about the potential vendor. Its purpose is to help the buyer determine if the vendor is really qualified to
supply the needed product or service. Information requested includes the vendor's financial status, the
number of its currently installed systems or components, and the names of customers who can provide
references for the vendor.
The fifth section, the suppliers' section, asks for any additional information the potential vendor thinks
may be relevant. For example, the vendor here may explain a unique solution to the problem that the
buyer had not previously thought about.
The sixth section, the pricing section, provides a detailed format for vendors to follow to prepare their
price proposals. Pricing can be broken down into separate items for such things as maintenance,
licensing, and documentation. If the RFP is for a complete system, then the price proposal should include
separate items for software, hardware, installation, systems integration, and so on. In any proposal, the
vendor should also distinguish between one-time and recurring costs.
The seventh section, the contract and license agreement section, provides guidance to potential vendors
on how to respond to contracts and agreements, and also provides contracts used by the buyer so
suppliers can study them.
The eighth section is the appendices. Appendices provide additional information that supplements the
rest of the RFP or that was too technical or detailed to be included in the main body of the document.
At the very least, an RFP must contain four of these eight sections: project overview and administrative
information, technical requirements, management requirements, and pricing.
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122)
Briefly outline the steps in the procurement process. Which process groups do the procurement processes
belong in?
Answer:
Planning purchases and acquisitions is the process of determining which of your projects needs can best
be met by obtaining services or products from outside the project organization. Typically, this implies
vendors from outside of the overall organization, although it is possible for some services and products
to be obtained from other units within the organization. Once the decision has been made to procure
externally, planning contracting can begin. The main task of planning contracting is to create the
documents needed to support the processes of requesting seller responses and selecting sellers. These
documents are used to seek proposals from prospective vendors. They describe what is to be purchased
and ask for offers from vendors who are interested in providing it. The main task of requesting seller
responses is to obtain bids that respond to the RFP. Once responses or bids are in hand, the process of
selecting sellers begins. Here the bids are compared and judged by the selection criteria that the project
organization has established. A vendor is chosen, and a contract is prepared. Contract administration is
the process through which the project organization works with the vendor for the duration of the
contract. Finally, once the terms of the contract have been satisfactorily met, contract closure begins. Both
sides of the agreement accept the work performed, and the contract is completed.
Planning purchases and acquisitions and planning contracting are both part of planning; requesting seller
responses and selecting sellers belong to the executing process group; contract administration is part of
the monitoring and controlling process group; and contract closure is a closing process. There are no
procurement processes in the initiating process group.
123)
Describe the three types of possible contracts offered to vendors.
Answer:
For a fixed price contract, the project requirements have been sufficiently detailed for suppliers to feel
comfortable in establishing a fixed price. The supplier or vendor is bound to the price provided in the
contract. A fixed-price contract is less problematic when the product or service is well-defined.
A cost-reimbursable contract involves the reimbursement of the vendor's actual costs in providing the
product or service plus, typically, a fee that represents the vendor's profits. Costs are considered to be
either direct or indirect. Direct costs are those incurred by the vendor in providing the product or service.
Indirect costs, also called overhead costs, are part of the vendor's cost of doing business and involve such
things as the salaries of managing executives. Indirect costs are typically billed as a percentage of direct
costs. For example, many sponsored research contracts between universities and government sources
involve cost-reimbursable contracts, and indirect cost rates set by universities are as high as 50 percent or
more.
Under time and materials (T&M) contracts, vendors state an hourly rate and estimate the amount of time
and materials required. It is possible to cap a T&M contract by asking the vendor to provide a
not-to-exceed price. Otherwise, the price is open. For a T&M contract, it is often recommended that
contract requirements specify review points and progress assessments. The contractor may also want to
tie payment to deliverables (Porter-Roth, 2002).
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