A contract has the following data: Target Cost = 300K Target Fee = 15K Max Fee...
A contract has the following data: Target Cost = 300K Target Fee = 15K Max Fee = 20K Min Fee = 5K Share Ratio = 80/20 Actual Cost = 360K What is the final price that would be paid to the contractor?
Homework Answers
Actual cost = 360 K
Target fee = 15 K
Contractor's share of overrun = (360-300) * 20% = 12K
Contractor's fee = Target fee - Contractor's share of overrun = 15k -12 k = 3k , however minimum fee is 5k.
Final price paid to contractor = Actual cost + Contractor's fee = 360k + 5k = 365K
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