How businesses selects which projects to work on
When a business is selecting a project, there are four steps they can utilize to get the most suitable one:
Come up with criteria against which the projects will be evaluated. These criteria will serve to evaluate potential projects and support project selection.
Delegate your assignment to our experts and they will do the rest.
Make a list of assumptions that will serve as basis for each project.
Gather data and information from credible sources to help attend to each project. This will help make an intelligent decision on the suitable project.
Evaluate every listed project against the criteria. It’s advisable to have different individuals evaluate the projects in order to have various viewpoints.
After successful selection it’s advisable to review them regularly to ensure they are in line with the strategy.
How customers evaluate proposals and the factors they look for
According to Beckner (2014) some customers evaluate the prices of various proposals and go for those with lowest prices. Other customers may choose to screen out the proposals that are above their budget or simply those that do not meet the stated requirements. Some financiallyable clients may create a review team to go through the proposals. Such a team will settle on proposals that meet all the stated requirements and those that are top rated against a predefined evaluation criterion. Mostly the factors that customers look for are compliance with the requirements, contractors experience and success in similar projects. Price and the practicality of the proposal in solving the problem are also considered (Beckner, 2014).
Selecting lowest-priced proposals
It is not always recommendable to go for the lowest-priced proposal; it is rather advisable to evaluate and ensure all requirements have been met satisfactorily. A contractor maybe offering low prices simply because they have neglected some requirements(Beckner, 2014). Additionally, they might be supplying substandard materials and therefore quote a minimal price. A good example is when customer needs a refrigerator and its accessories. A contractor may offer to supply such a refrigerator at low price and then go get a substandard machine which may be accompanied with cheap accessories and fake warranty. After a short while the refrigerator can be prone to failing or breaking down. This will lead the customer to incurring extra costs on repairs or replacement.
Types of contracts when they can be used and possible risks involved with each
There are generally two types of contracts; the fixed price contract and the cost reimbursement contracts. With the fixed price contracts the buyer and the seller settle on a fixed price for the project. This contract is typically used in governmentprojects. The seller usually commits to high risks with these contracts; as the price is fixed the buyer has no much risk. When the project delays and there are extra contracts the seller will have to attend to them. This type is suitable when supplying the federal government or its departments.
For the cost reimbursement contracts the seller commits to work for certain duration and later they will bill for the finished work. This type is used when the scope of work is unclear. This contracting method is risky as the seller can give unrealisticquote for the work done and the buyer will be compelled to pay(Beckner, 2014).
Reference
Beckner,M. (2014).Proposals and Contracts. The Coder's Path to Wealth and Independence , 113-127. Retrieved from
https://link.springer.com/chapter/10.1007/978-1-4842-0421-4_8#page-1
