Payment Contract Types: Cost-Reimbursable And Fixed-Price Contracts Essay.

Literature Review on Payment Contract Types According to Acquisition Guide (2008) Payment Contract Type is the alternatives of contracts which are based on the payment type and structure type. For the Payment type, it has mainly divided into Fixed-price and Cost-Reimbursement Contracts. Also, there are many types of contracts which are not related to the payment type. In this literature review we will discuss these contract types.

Cost-Reimbursable contract

In this agreement, the organization consents to pay the contractor for the cost of performing the administration or giving the products and goods (Wiley, 2016). Costreimbursable contracts also include cost-plus contracts. Cost-reimbursable contract is regularl utilized when the extent of work or the expenses for playing out the work (Acquisition Guide, 2008). Since the cost of the undertaking is reimbursable, the contractual worker has considerably less hazard related to cost increases. This contract includes the following types:

• Cost Contracts
• Cost-Sharing Contracts
• Cost-Plus-Incentive-Fee Contracts (CPIF)
• Cost-Plus-Award-Fee Contracts (CPAF)
• Cost-Plus-Fixed-Fee Contracts (CPFF)

 This type of contract is most suitable for a project where the designer and contractors

have prepared the plans, specifications and other documents (Wiley, 2016). The advantage of Fixed-Price Contract is that both parties know the scope of the work, and the total cost of the task before the work is started. The owner is not required to pay for any of the contractor’s cost overruns. This contract type must be fully detailed specifications, checklists, project scope statements from the contractor side which the owner will use. According to Acquisition Guide (2008) described the Fixed-Price contracts can include the following types:

• Firm-Fixed-Price Contracts (FFP)
• Fixed-Price Contracts with Economic Price Adjustments
• Fixed-Price Incentive Contracts (FPI)
• Fixed-Price Incentive (Firm Target) Contracts
• Fixed-Price Incentive (Successive Targets) Contracts
• Fixed-Price Contracts with Prospective Price Redetermination
• Fixed-Price Contracts with Retroactive Price Redetermination
• Firm-Fixed-Price, Level-of-Effort Term Contracts (FP/LOE)

Cost-Reimbursable contract

The construction industries have been facing a great deal of boost with the inclusion of effective economy and development process. Innovative technology was helpful for improving the construction and development of the green house building construction. The PDS management would help in easing the execution of the construction operations. The utilization has been based on the analysis of the program and execution system. The program delivery system (PDS) is the most effective tool helpful for the information and delivery of the project. The PDS allows the use of the proper project execution and allowance of the activities completion for successful completion of the project (Xia et al., 2014). The project of ‘green house construction’ is executed so that the workers and contractors has been able to construct a building with all the green technologies (energy efficient and reduced waste generation). The method of Design Bid Build (DBB) contract has been helpful for supporting the resources and allowing the completion of the successful project completion. The following assignment would include the literature review of the PDS process and the green house construction. The completion of the project has been effectively helpful for building the house compatible with all the necessary and effective green house technologies. The PDS is more helpful for successfully developing the allowances of the information aligning with the completion of the project delivery system. The project delivery system of design bid build is helpful in forming the construction of the green building development. The activities of construction is helpful for building 

The Green House deployment project was selected for easing the implication of the innovative construction project operations. The construction activities were implied for developing the Green House Project with the help of PDS tool. The support of PDS would imply the use of successive deployment process. The deployment of green house would involve the use of the formation deployment. It would allow the utilization of factors and deployment of listing processes. The implication would involve the formation of listing the use of the successive deployment. The construction of the greenhouse has resulted in forming the major setback for easing the formation deployment. The listing of the proper deployment management includes the listing of the construction principles. The involvement would develop the improvement of the factors aligning the improvement of the operations. The utilization of PDC can be helpful for easing the improvement of the facilities of developing the implication of the operations. The PDC implication has supported for easing the execution of the construction activities and listing the utilization of Green House technology.

Fixed-Price Contract

The Green House Construction has been effectively for listing the utilization of the functions and alignment management. The construction of the house with green technology would align for the formation of the operations. The construction of the house has been eased with the PDS technology principle and it would allow easing the technology installation. The green house construction is helpful for easing the utilization of PDC formation and the successful constitutes of the operations. The project of ‘green house construction’ is executed so that the workers and contractors have been able to construct a building with all the green technologies (energy efficient and reduced waste generation). The completion of the project has been effectively helpful for building the house compatible with all the necessary and effective green house technologies. The PDS is more helpful for successfully developing the allowances of the information aligning with the completion of the project delivery system. The involvement of the operations has been helpful for listing the involvement of the successful management. The construction of the greenhouse has resulted in forming the major setback for easing the formation deployment. The listing of the proper deployment management includes the listing of the construction principles. The involvement would develop the improvement of the factors aligning the improvement of the operations. The utilization of PDC can be helpful for easing the improvement of the facilities of developing the implication of the operations.

The special needs and requirements of the project of Green House Construction have been effective for easing the implication of the improved analysis. The development of the green house construction requires use of effective technology, inclusion of project management principles, and support of labours. The explanation of the requirements is given below,

Use of effective technology: The effective technology development has been helpful for listing the alignment of the improved project execution. The improvement of the operations would support the involvement of the factors of improved green house technology for listing the formation of the improved project execution.

Inclusion of Project Management Principles: The project management principles have been effectively deployed for listing the utilization of the improved principles of project execution and aligning the utilization of the successive management. The construction of the green house building would require the alignment of construction project management principles of documentation, planning, execution, and closure.

Support of labours: The procurement development has been eased with the inclusion of the formal and effective development of the operations. The contractor and workers has been required for implying the utilization of the operations aligning with the development of the successive development model. The inclusion of the labour support has been effectively employed for taking care of the execution of the project operations.

Green House Construction

Project Delivery system (PDS) is one of the most effectively used relationship identification process between the negotiating parties. It highlights the roles and responsibilities along with perks and constraints for the execution of the project. The alignment would also be helpful in making sure that the final deliverable of the project has been achieved without any problem or flaw. The various types of PDS are design bid build (DBB), design build (DB), construction management at risk (CM@R), and Integrated project delivery (IPD). The explanation of the PDS are given below,

Name of PDS	Description
Design bid build (DBB)	The design bid build is one prominently used PDS method and the allowance has been helpful for easing the utilization of the construction detail analysis, probable development model, and inclusion of the services like document purchases, investigation, submission of documents, and permitting.
Design build (DB)	It is a method of defining the delivery contract with only one party for the design and construction. The issues in this contract system has been refereed by the owner only. The main feature of DB is the expense paid designer.
Construction management at risk (CM@R)	It is similar to the DBB and the system allows the owner with the benefit of pre-development management and modifications. The CM@R has the option for bidding too and guaranteed maximum price concept is included in this PDS option.
Integrated project delivery (IPD)	Integrate Project Delivery is a multiparty agreement system that allows the inclusion of the many contractors and sub-contractors. It includes the cost reimbursement, rewards for completion, and incentive for project costs targets.

According to Hand et al. (2015), the PDS that has been prevalent in the construction industries are assistive for the improvement of the factors of deployment and influence of the improved functional and deployment model. The PDS is assistive of the information deployment and making it more effective for easing the utilization of the traditional construction process. The traditional structure of PDS is tri-partite in nature supporting the hierarchy communication. The process is very simple and it allows the utilization of the simple process for the improvement of the information. The utilization of the better techniques of PDS has been assistive of the project activities execution. The traditional method of project delivery has been helpful for supporting the use of the proper and effective utilization of the factors. The study by Bingham, Gibson Jr and El Asmar (2018), have provided an understanding the benefit of traditional PDS and it is evident that the major benefit of using it is the deployment of plan prior to the final pricing. In this process, the contractor or manager estimates the project deployment of ease of utilization of the improved functional deployment. The completion of the project of construction has been eased with the use of the traditional PDS as the pricing of all the required materials and operations. The deployment of the innovative technology processing has been helpful for forming the information transfer. The integration of the operations would support the utilization of the factors for easing the implication of the information. On the other hand Tsai et al. (2014), have pointed out the possible problems the current construction projects have to face due to the use of the traditional PDS. The probable problems of using the PDS are slower delivery time and adversarial relationship might occur among stakeholders. The possible issues of slower delivery time have been resulted in forming the assistive and effective implication model. The delivery of the project would tend to the information deployment for aligning the utilization of the factors improving the utilization of the factors. The information processing had been resulting for the utilization of the operations integrating the functions of construction. However, it would exhaust much time resulting in probable delay in completion of the project.

Project Delivery System (PDS)

The most appropriate contract type for PDS of Green House Construction Project is Design Bid Build (DBB) operations. The successful execution of the project has been supported by the use of the proper and effective execution of DBB would allow the significant formation of the improved analysis and development (Dang & Le-Hoai, 2016). The DBB contract development would help in easing the utilization of the improved operation development. The DBB contract development would ease the simplifying of the probable project analysis and development. The influence of the operations would help in listing management of the functions defining the system influence for listing the probable development. The selection matrix is shown below,

Criteria	Design build (DB)	Construction management at risk (CM@R)	Integrated project delivery (IPD)	Design bid build (DBB)
Delivery Speed	1	4	3	5
Quality	1	2	2	3
Flexibility	3	4	5	3
Complexity	1	5	2	4
Cost Certainty	5	5	4	5
Innovation	2	3	3	5
Change Management	1	5	5	4
Dispute	5	2	3	4
Owner’s Risk	4	5	1	2
Availability	2	3	1	4
Market Competitive	1	3	3	4
Technology	4	1	3	5
Impact	2	4	3	2
Total	32	46	38	50

The Design Bid Build is an innovation process for PDS utilization and achieving the final construction project. The innovative method of design bid build has been helpful for ensuring that the program execution and final project delivery would allow the simplifying of the project activities. The method of Design Bid Build (DBB) contract had been helpful for preserving the resources and allowing the completion of the successful project completion. The utilization of the PDS was easing the formation deployment for easing the implication of the project delivery methods. The use of the PDS was helpful for increasing the pace of the operations and forming the improvement management. The benefits of using DBB for the Green House Construction project are,

Competitive Bidding: It is the most used method of competitive bidding and it can be used for easing the probable growth and development of information processing. The competitive bidding has been helpful in listing the influence of operation alignment. The success of the possible growth development is helpful for analysing the Request for Proposal and listing the possible solution development. The contractor that has been responsible for the development of infrastructure has been

Informal Bidding: The informal bidding can be used for easing the utilization of the operations and it would imply the significant formation management. The bidding and development would successful implication management. The bidding of the project has been available for selective contactors.

The swot analysis has been deployed for listing the analysis of the factors of strengths, weaknesses, opportunities, and threats for implying the PDS in the project of Green House Construction project. The analysis of these factors would align with the utilization of these factors for listing the construction project execution. The SWOT analysis of the scenario is shown below,

Strengths Utilization of the green house technology for the construction of the house Evaluating the prospect of developing the improved implication management	Weaknesses Time exhaustion for the alignment of the operations and listing the utilization Lack of pre information development has been one weakness of the project
Opportunities Several opportunities for easing the utilization of the factors of provision Reduction of wastage and conservation of energy is a major opportunity	Threats Probable issues in listing the factors of operation and development Development has been slow resulting in major setback for the operations

Types of PDS

The risk migration has been eased with the utilization of the risk assessment matrix development. The utilization of the risk identification and development has been eased with the formation of effective management process. The risk matrix for the Green House Construction and addition of DBB PDS system,

Risk Name	Description	Likelihood	Severity	Impact
Lack of Information	Information unavailability would result in forming issues in completion of the project	Likely	Moderate	Medium
Delay in Development	Time consumption is another major factor for delivery of the project	Almost Certain	Minor	Low
Disagreement of the workers	Workers might not agree with the completion requirement of the project	Possible	Major	Very High
Contract Violation	It is possible that the contractor might violate the terms of the contract	Unlikely	Severe	High

The following diagram would show the design bid build PDS that can be used for the Green House Construction,

Figure 1: DBB Structure

(Source:)

The Payment Contract Types are of Cost Reimbursable, GMP, Fixed Price, and Fixed Price Economic Price Adjustment (FPEPA). The effectiveness of the cost management would limit to the prospect of improved alignment deployment (Xia et al., 2015). The project of ‘green house construction’ is executed so that the workers and contractors has been able to construct a building with all the green technologies (energy efficient and reduced waste generation). The completion of the project has been effectively helpful for building the house compatible with all the necessary and effective green house technologies. The PCT is more helpful for successfully developing the allowances of the information aligning with the completion of the project delivery system. The information processing had been resulting for completion of the construction projects and final project delivery would allow the simplifying of the project activities.

Payment Contract Type	Description
Cost Reimbursable	The involvement has been aligned for easing the simplification and development operations. The owner accepts the form for paying a certain amount of money for the improvement of the proper management processing. The cost for the materials has been paid by the owner.
GMP	GMP is helpful for aligning with the development of the successful and effective influence of the effective and smart development of the cost processing. The involvement has been aligned for easing the simplification and development operations. The owner accepts the form for paying a certain amount of money for the completion of the project.
Fixed Price	Fixed Price is the most acceptable form of developing the successive alignment of the operations for the cost management and analysis. The completion of the project has been helpful for managing the improvement and cost formation. No overrun is paid by the owner in this scenario.
Fixed Price Economic Price Adjustment (FPEPA)	Mutual agreement by the owner and utilization of the proper development formation. The buyer and seller would agree on a fixed price and the terms has been aligned for implying the use of proper implication management.

Senouci, Ismail and Eldin (2016) have pointed out that design build is the most optimistic Payment Contract Type (PCT) for the completion of the construction projects is the Classical Design Bid Build Process. The utilization of the design bid build would take care of the integration of the operations and supporting the construction projects. According to Abkarian, El Asmar and Underwood (2017), the PCT system is helpful for increasing the speed of operations for the construction project. The improvement of the project delivery speed has been aligned for delivering the utilization of the factors. The delivery of the project would support the improvement of the functions aligning the utilization of the proper delivery system for execution of the project completion. The enlisting of the proper and effective simplification of the factors listing the formation of the deployment functions. The utilization of the improved functional deployment was helpful for increasing the probable deployment of the project formation. Moreover, Ramsey, El Asmar and Gibson Jr (2016) have pointed out the PCT allows the single point responsibility of owner for the construction projects. The involvement of the assistive and effective use of the innovation would allow the utilization of formation deployment. The influence of the successive formation deployment would align with the influence of the smart project delivery system. The responsibility of the project completion has been on the owner of the project and it would also result in supporting the utilization of the factors for alignment. The deployment would also be helpful for developing the utilization of the factors of improvement. The PCT system would combine with the benefits of the increase performance and the single point ownership of project responsibilities. Mirzadeh and Birgisson (2015) have pointed out that PCT have also provided the benefit of implying the greater and earlier utilization of the cost effectiveness. The calculation of the project cost for the construction of the Green House was limited to the utilization of the improved functional and deployment factors. The implication of the factors aligning the functional and deployment of the functions would align with the improvements of the function deployment. The implication of the factors aligning the deployment of the effective cost management had aligned with the use of the certain cost management. The effectiveness of the cost management would limit to the prospect of improved alignment deployment (Xia et al., 2015). The project of ‘green house construction’ is executed so that the workers and contractors has been able to construct a building with all the green technologies (energy efficient and reduced waste generation). The completion of the project has been effectively helpful for building the house compatible with all the necessary and effective green house technologies. The PCT is more helpful for successfully developing the allowances of the information aligning with the completion of the project delivery system. The information processing had been resulting for completion of the construction projects and final project delivery would allow the simplifying of the project activities. The influence of the successive formation deployment would align with the influence of the smart project delivery system (Cao et al., 2015). The responsibility of the project completion has been on the owner of the project and it would also result in supporting the utilization of the factors for alignment.

The Payment Contract Types are of Cost Reimbursable, GMP, Fixed Price, and Fixed Price Economic Price Adjustment (FPEPA). The Fixed Price payment contract type has been selected for easing the process of payment to the contractor. The project of Green House Construction has been effectively for listing the utilization of the functions and alignment management. The construction of the house with the improvement operations and it would allow the formation of easing the implication management. The project of ‘green house construction’ is executed so that the workers and contractors has been able to construct a building with all the green technologies (energy efficient and reduced waste generation).

Criteria	Fixed Price Economic Price Adjustment (FPEPA)	Cost Reimbursable	Fixed Price	GMP
Estimation	5	2	4	2
Provisional	2	2	3	1
Value and returns	3	3	4	2
Total	10	7	11	5

Effective Contract Management: The use of the DBB for the Green House Construction project would allow the implication of the better cost contract management. The involvement of the operations would support the utilization of the proper document management for the improved communication and development. The contract management is an important factor for achieving the utilization of the possible methods.

Achievement of benchmark: The benchmark set for the achievement of the greenhouse construction has been aligned for easing the management of the factors and development. The greenhouse construction has been aligned for listing the proper management integration. The implication of the successive operation development has been aligned for listing the probability development.

The fixed payment contract type has been selected for the project of Green Building Construction. The structure of the Fixed Payment Contract Type can be divided into Firm Fixed price, Firm price plus incentive fee, and fixed price as shown below,

Figure 2: Fixed Payment Contract Type

(Source:

Conclusion

The study helped in understanding that the program delivery system (PDS) was the most effective implication of the information and delivery of the project. The PDS allows the use of the proper project execution and allowance of the activities completion for successful completion of the project. The project of ‘green house construction’ was executed so that the workers and contractors had been able to construct a building with all the green technologies (energy efficient and reduced waste generation). The utilization of the system delivery methods had help in listing the probable alignment of the pricing strategies of Green House Construction Projects. The possible issues of slower delivery time had been resulted in forming the assistive and effective implication model. The design bid build PDS was helpful for integration of the organization and forming the influence of the successive management process. The design bid build PDS is helpful for integration of the organization and forming the influence of the successive management process. Hence, from the literature review it was helpful for using the deployment of the possible and effective implication. The PDS is more helpful for successfully developing the allowances of the information aligning with the completion of the project delivery system. The information processing had been resulting for completion of the construction projects and final project delivery would allow the simplifying of the project activities. The design deployment would list the communication management and utilization of communication deployment. The PDS is helpful for listing the influence of effective and smart deployment of operations. The better communication would align for successful project activities and increasing the construction projects. The influence of innovation would list the formation of the deployment factor for using the communication deployment.

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