Every entrepreneur enters into business to make profit and grow their business. In order to do this they offer their products and services at a markup. However not all business are that simple and straight forward. A good example is the construction business. Some constructions are mega and even the best planners can fail to project all contingencies. For instant, a project can take longer than projected because of unforeseen delays. 

Similarly the cost of material and other overhead can hike considerably due to unforeseen eventualities such as inflation, material shortages or political unrest. As we all know once a person has given their terms of reference and signed a contract under certain terms they are obligated to perform such a contract. This clearly shows how unfair it would be for a contractor to complete a project in which they will make losses due to unforeseen eventualities. This article will discuss the best way to important facts about how to determine a contract price.

When determining a contract price the contractor must consult financial experts and consider all possible eventualities before determining the contract price. If such a contractor opts for a fixed price contract, they could risk making great losses if they cannot operated under projected terms or projected costs. For mega projects which are of large scale and take a long time to complete, such contractors should seek an alternative contract. 

Projects which run for long periods of time can face the challenge of substantial hike in the cost of material. This price increase may range between twenty to fifty percent increase. Furthermore such mega projects may run for a longer period than the initial projected contract duration. The best remedy for the mega project contractor would be to go for a time and material contract as opposed to a fixed contract. 

In the time and material contract, the client is billed as per time invested in the contract or charged for the exact material the contractor uses in the construction. This type of contract requires understanding and suitable tools for proper management. If the time invested and the material used is not tracked effectively, both the contractor and client stand to incur losses or to exceed the budget estimates. This type of contract should be tracked using suitable software. Time and material tracking software will ensure that the relevant information is captured on a real time basis. this way the client can manage their budget disbursement effectively and the contractor can charge the client correctly. Learn more about contract management here: https://us.cnn.com/2018/08/10/cnn-underscored/best-project-management-course-shop/index.html.