HW23: Chapter 22

22.6. Fixed-price contracts, where the contractor bids a fixed price to complete a system development, may be used to move project risk from client to contractor. If anything goes wrong, the contractor has to pay. Suggest how the use of such contracts may increase the likelihood that product risks will arise.

Fixed price contracts can by putting to much on the developer’s company’s plate. To have a fixed price contract mean one should have thought out the entirety of their system before commencing building. Set backs can happen here if the company starts putting the system together, and realizes they are over budget. its then up to the company to fix their issues on their own dime. Potentially loosing a substantial gain in company profits. Other issues could arise when the company needs to purchase new hardware or anything critical to producing a well working system. This could be massively hindered by the fixed price contract, and could leave engineers working in sub standard conditions. Basically when put in terms of a fixed priced contract any small issue that arises will be a greater issue when constrained by the contract.