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2020-05-24
Establish Equation Contract Feature
The Establish Equation Contract feature streamlines your workflow by allowing you to create, manage, and enforce contracts with ease. With this feature, you can address common challenges in contract management while enhancing your operational efficiency.
Key Features
User-friendly contract creation wizard
Automated contract tracking and reminders
Customizable templates for various industries
Secure electronic signatures
Real-time collaboration tools
Potential Use Cases and Benefits
Enhance vendor management processes
Simplify client agreements and onboarding
Improve compliance with legal regulations
Streamline negotiations with built-in communication tools
Increase visibility and accountability across contracts
By utilizing the Establish Equation Contract feature, you can significantly reduce the time spent on drafting and tracking contracts. This not only lessens the risk of errors but also ensures that you meet deadlines and obligations. Ultimately, this feature empowers you to focus on what truly matters—growing your business.
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How are FIF contracts calculated?
The PTA is derived from the following formula: PTA = ((ceiling price target price/government (overrun) share ratio)) + target cost. As such, it can be manipulated by changing any of the formula's values. How does the FIF profit sharing formula work?
What is a FIF contract?
Fixed price incentive fee (FIF) contract. A type of contract where the buyer pays the seller a set amount (as defined by the contract), and the seller can earn an additional amount if the seller meets defined performance criteria.
What does FIF stand for?
The point of total assumption (PTA) is the point above which the seller effectively bears all the costs of a cost overrun on a fixed price 'incentive fee' (FIF or FBI) contract. The seller bears all the cost risk at PTA and beyond, due to a dollar for dollar decrease in its profits for costs in excess of the PTA.
What are cost type contracts?
A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor's cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss.
What is a fixed price incentive contract?
A fixed-price incentive contract is a fixed-price contract that provides for adjusting profit and establishing the final contract price by application of a formula based on the relationship of total final negotiated cost to total target cost.
What are incentive contracts?
Incentive Contract Law and Legal Definition. Incentive contracts are entered into when there is some uncertainty in the cost of work, particularly when a product is being built to unique specifications. These contracts specify the amount of profit or fee payable under the contract for a contractor's performance.
How is CPI calculated?
Target Cost = 1,000.
Target Fee = 100.
Benefit/Cost Sharing Ratio for cost overruns = 80% Client / 20% Contractor.
Benefit/Cost Sharing Ratio for cost under runs = 60% Client / 40% Contractor.
What is range of incentive effectiveness?
It is important to recognize that a CPI pricing arrangement incorporates a minimum and maximum fee and that the cost control incentive resides between the start of these two cost points. The cost point(s) where the cost share ratio is in effect is called the Range of Incentive Effectiveness (RIE).
What type of contract guarantees the amount of profit?
Cost-plus contracts are an alternative to fixed-price or lump sum agreements that allow greater flexibility and more transparency for the owner of a property. For the contractor, risk is reduced, because a cost-plus contract guarantees a profit.
What is fixed price incentive fee?
A fixed price incentive fee contract provides contractors with an additional financial incentive upon completing a project. 4 min read. A fixed price incentive fee contract provides contractors with an additional financial incentive upon completing a project.
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