Understanding Different Contract Modalities
1) For the highlighted types of undertakings, which contract modes are the best? Explain the reason behind your choice for each question.
When a buyer wants to order a pencil manufacturer to manufacture 20 000 pencils for them.
A cost-plus award fee contract would be the most appropriate contract mode for the undertaking. In the CPAF contract mode, a pool of extra award fees is usually created. As a result, if the contractor does an excellent job producing quality pencils, the buyer would choose to award the pencil manufacturer an extra fee from the award fee set aside in the pool.
