An agreement on a construction project where the contractor earns a specified percentage profit over the actual costs incurred. This contract type is considered suboptimal due to reduced incentives for cost control. An alternative approach is the cost-plus-fixed-fee contract.
A Fixed-Price Contract is a type of contract where the price is preset and not affected by the actual costs incurred during production or service execution. It ensures cost certainty for the buyer, transferring risk to the seller.
Spend management is a strategic and systematic approach to optimizing a company's total expenditure to achieve the best value for money, integrating areas such as sourcing, procurement, contract management, and supply-chain logistics.
