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	<title>PMServicesNW &#187; project pricing</title>
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		<title>Fixed Price vs. T&amp;M</title>
		<link>http://www.pmservicesnw.com/2010/11/fixed-price-vs-tm/</link>
		<comments>http://www.pmservicesnw.com/2010/11/fixed-price-vs-tm/#comments</comments>
		<pubDate>Mon, 01 Nov 2010 13:31:18 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Pricing]]></category>
		<category><![CDATA[Project Management]]></category>
		<category><![CDATA[fixed price]]></category>
		<category><![CDATA[pricing a project]]></category>
		<category><![CDATA[project budgeting]]></category>
		<category><![CDATA[project pricing]]></category>
		<category><![CDATA[project pricing options]]></category>
		<category><![CDATA[T&M]]></category>
		<category><![CDATA[time and materials]]></category>
		<category><![CDATA[types of project pricing]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=24</guid>
		<description><![CDATA[By: Ray Myers, Jr., PMP There are many ways to price a contract, the most common being Firm Fixed Price and T&#38;M.  Selecting the right contract type for your project shouldn’t be a big deal; each one has its own advantages and disadvantages.  The Project Manager should have a firm understanding and working knowledge of the various contract types and how their use may affect project outcomes. Contract Types Firm Fixed Price (FFP): The fee to provide the product or services is quoted and fixed for the duration of the contract.  FFP contract shifts the project risks to the Provider, who is responsible for cost, performance and profit or loss.  The Buyer pays a fixed fee and does not need to know what the Provider is actually spending on the project. Time and Materials (T&#38;M):  The fee is quoted as an hourly rate plus the cost of materials, supplies, or travel expenses.  The T&#38;M contract is used when the Buyer wants full control over the project.  Provider profits are factored into the hourly rate and the Buyer is billed for the hours worked. Cost Plus:  There are actually several variations of Cost Plus, they include: Cost Plus Incentive Fee (CPIF), [...]]]></description>
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		<title>Project Pricing – T&amp;M</title>
		<link>http://www.pmservicesnw.com/2010/09/project-pricing-%e2%80%93-tm/</link>
		<comments>http://www.pmservicesnw.com/2010/09/project-pricing-%e2%80%93-tm/#comments</comments>
		<pubDate>Thu, 30 Sep 2010 04:33:01 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[project pricing]]></category>
		<category><![CDATA[project pricing T&M]]></category>
		<category><![CDATA[T&M]]></category>
		<category><![CDATA[time and materials]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=1826</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP T&#38;M, short for Time and Materials, is a common pricing methodology that is used when the project scope is not clearly defined or when the scope frequently changes.   T&#38;M contracts are ideal for small projects or tasks because the client pays for only the actual hours worked and the materials used on the project.  This arrangement gives the client the greatest leverage for obtaining services at the lowest possible price. T&#38;M pricing is quoted based on an hourly, daily, weekly or monthly rate.  The service provider’s profit is built into the quoted hourly rate and any materials used during the course of the project.  Travel expenses are generally reimbursed at cost.  The client’s cost is determined like this:   (Hours Worked x Hourly Rate) + Materials + Expenses   Advantages to the Client Generally less expensive than fixed price or flat rate pricing Provides greatest flexibility when the project scope is not clearly defined Enables scope changes without the hassle of scope control or change management procedures Provides the most control over the project Easy to terminate or cancel the project Disadvantages to the Client Overall responsibility for the project scope, all project deliverables, [...]]]></description>
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		<title>Project Pricing &#8211; Margin</title>
		<link>http://www.pmservicesnw.com/2010/09/project-pricing-margin/</link>
		<comments>http://www.pmservicesnw.com/2010/09/project-pricing-margin/#comments</comments>
		<pubDate>Sun, 26 Sep 2010 03:52:46 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[profit margin]]></category>
		<category><![CDATA[project pricing]]></category>
		<category><![CDATA[use margin to calculate price]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=1821</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP According to the businessdictionary.com, margin is defined to be: the difference between the cost price and the selling price of a product.  In other words, margin is the profit earned on a business transaction. Margin is usually measured as a percentage of the selling price.  Thus the project manager might say, “We earned 30% margin on this project.”  There are 2 margin calculation formulas that every project manger involved with project pricing should know.   Use Margin to Calculate Sell Price Use this formula to calculate the selling price of a product or service when the cost and desired margin is known.  For the purpose of this example, assume the hourly cost is $100 and you want to calculate a selling price with 30% margin. Sell Price = Cost / (1 – Margin) Sell Price = $100 / (1 &#8211; .30) = $142.85 per hour   Calculate Profit in Terms of Margin Use this formula to determine the profit margin you earned on a project when the project cost and sell price is known.  Assume that your project cost $700 and you sent a $1,000 invoice to your client.  What was your profit margin? Margin [...]]]></description>
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		<title>Project Pricing &#8211; Markup vs. Margin</title>
		<link>http://www.pmservicesnw.com/2010/09/project-pricing-markup-vs-margin/</link>
		<comments>http://www.pmservicesnw.com/2010/09/project-pricing-markup-vs-margin/#comments</comments>
		<pubDate>Fri, 24 Sep 2010 02:32:28 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[markup vs margin]]></category>
		<category><![CDATA[project margin]]></category>
		<category><![CDATA[project markup]]></category>
		<category><![CDATA[project pricing]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=1735</guid>
		<description><![CDATA[By: Ray Myers, Jr., PMP  Is there a difference?  You bet, and understanding the difference between these confusing terms may impact the profit you make on your project.  Let’s define the terms and do a quick calculation to see the difference between the two pricing concepts. Markup Markup is the difference between the cost of your project and the selling price. Markup is calculated by adding a percentage of the project cost to the project cost to determine the sale price.  Assume an hourly rate of $100 and we use a 25% markup to determine the sale price. Sale Price = hourly rate + (hourly rate * markup %) Sale Price = $100 + ($100 * .25%) = $125 Margin Gross margin is the difference between the cost of your project and the profit. Margin is calculated by dividing the hourly rate by 1 – the desired margin.  Using the previous assumptions in the above example, margin is calculated like this: Sale Price = hourly rate / (1 – margin %) Sale Price = $100 / (1 – 25%) = $133.33  See the difference between the two calculations.  It doesn’t look like much, but using the wrong calculation could significantly [...]]]></description>
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