IT Contracting in the Real World

Though procurement management is an important part of project management, candidates for the PMP exam are required to study and memorize a pretty curious contract framework.  Procurement and contracting in the IT world is changing in interesting ways, but is significantly different than what is described in the PMBOK.  The PMP requires the ability to describe three kinds of fixed price contracts and four kinds of “cost plus” contracts.  The PMBOK uses a range of acronyms for these seven types (FFP, FP-EPA, FPI, CPAF, etc.)  The PMBOK briefly mentions in passing two other types of contracts:  unit pricing and time and materials (T&M.)

The vast majority of real world IT contracts are firm fixed price, time and materials, or some kind of unit pricing.  In the jungle of IT contracting, the other contract types described in the PMBOK are rare, large, and perhaps dangerous animals.  Here is one framework for categorizing, comparing, and contrasting the various kinds of real IT contracts.

In a few following posts, I will provide some details on these kinds of contracts, and some considerations for the project manager whose project involves these kinds of procurement vehicles.

I welcome your comments and feedback based on your experience managing real-world IT contracting.  Feel free to contact me directly.

(Image courtesy of Poswiecie at Pixabay.)