A contractor's fee rises as the actual costs rise. This is disfavored because there is no incentive for cost control on the part of the contractor, and the federal government is prohibited...
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Purchasing cost reductions are sustainable in character. These may be the result from a change of specification, a change of supplier, or omitting any unnecessary product quality requirements.
A compensation model fully reimburses a supplier for their actual cost plus an additional markup. The markup can either be variable or a fixed fee. By definition, cost reimbursement is a variable...
Also known as a cost plus contract, cost reimbursement contracts are used by governments, private individuals and businesses that are embarking on building or construction projects, on research...
This is the amount the company saved through the process of sourcing the goods or services. Cost Savings can be difficult to define. In the simplest form, it can be defined by identifying the...
See Gainsharing.
Costs shall be quantifiable and may include, without limitation, the price of the given good or service being purchased; the administrative, training, storage, maintenance or other overhead...
A process outlined in the book "Getting to We-Negotiating Agreement for Highly Collaborative Relationships" which uses a systematic process for fairly allocating value.
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of...
Also referred to as strategic products/service. Critical products and services fall under one of the four Kraljic Matrix quadrants. In general these are products or services that are high-tech and...