Risk Flowdown- A Myth?- What do you think?

Not an opinion but an open forum for anyone contractually savvy to provide their “two cents”. For Prime contract that is either Cost reimbursable, Unit Prices or Time & Material, how true is the notion that risks from the Prime are flowed down to the sub-contracts? Are all costs being eventually paid up by the Customer?

May be you don’t get profits and Overhead on specific overruns, but all sub-contract costs are certainly included. Now how about Prime contracts that are Lumpsum; a different ball game here.These are contracts where risks and opportunities would be borne in its entirety by the contractor.

 

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Author: Ashok Iyengar

A published author and a Project Management professional I love to travel, mentor and network. Writing my travelogues, commentaries on political and social issues I create meaningful conglomerations between the west and east. I live in the Washington DC metro area. Just started a new journey with assisting teaching Project Management classes at GWU, Washington DC

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