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| What Type of Contract Do You Require - Fixed Price |
Although maligned for its perception that quality will gradually be eroded there are advantages in this contract for businesses/organizations who have stable numbers of employees and catering requirements. It is not suitable for those businesses or organizations who might have fluctuating numbers of staff as the contractor will ask for a variation to the fixed price if numbers drop or are increased. There is no risk of being over budget at the end of the year as the Contractor is guaranteeing his price for the first year. Subsequent years costs are linked to the Government RPI.
The main characteristics are:
a. Most risks transferred to Contractor
b. Can lead to lowering of quality and initiative
c. Reduced Client involvement
d. No discounts are returned
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