Project Monitoring and Control

Monitoring and Controlling are processes needed to track, review, and regulate the progress and
performance of the project. It also identifies any areas where changes to the project management
method are required and initiates the required changes.

The Monitoring & Controlling process group includes eleven processes, which are:

1. Monitor and control project work: The generic step under which all other monitoring and
controlling activities fall under.
2. Perform integrated change control: The functions involved in making changes to the
project plan. When changes to the schedule, cost, or any other area of the project
management plan are necessary, the program is changed and re-approved by the project
sponsor.
3. Validate scope: The activities involved with gaining approval of the project's deliverables.
4. Control scope: Ensuring that the scope of the project does not change and that unauthorized
activities are not performed as part of the plan (scope creep).
5. Control schedule: The functions involved with ensuring the project work is performed
according to the schedule, and that project deadlines are met.
6. Control costs: The tasks involved with ensuring the project costs stay within the approved
budget.
7. Control quality: Ensuring that the quality of the project?s deliverables is to the standard
defined in the project management plan.
 8. Control communications: Providing for the communication needs of each project
stakeholder.
9. Control Risks: Safeguarding the project from unexpected events that negatively impact the
project's budget, schedule, stakeholder needs, or any other project success criteria.
10. Control procurements: Ensuring the project's subcontractors and vendors meet the project
goals.
11. Control stakeholder engagement: The tasks involved with ensuring that all of the
project's stakeholders are left satisfied with the project work.

Kanban Board
A kanban board is an agile project management tool designed to help visualize work, limit work-in-
progress, and maximize efficiency (or flow). It can help both agile and DevOps teams establish
order in their daily work. Kanban boards use cards, columns, and continuous improvement to help
technology and service teams commit to the right amount of work, and get it done!

Elements of a kanban board

David Anderson established that kanban boards can be broken down into five components: Visual
signals, columns, work-in-progress limits, a commitment point, and a delivery point.

1. Visual Signals — One of the first things you’ll notice about a kanban board are the visual
cards (stickies, tickets, or otherwise). Kanban teams write all of their projects and work
items onto cards, usually one per card. For agile teams, each card could encapsulate one user
story. Once on the board, these visual signals help teammates and stakeholders quickly
understand what the team is working on.

2. Columns — Another hallmark of the kanban board are the columns. Each column
represents a specific activity that together compose a “workflow”. Cards flow through the
workflow until completion. Workflows can be as simple as “To Do,” “In Progress,”
“Complete,” or much more complex.

3. Work In Progress (WIP) Limits — WIP limits are the maximum number of cards that can
be in one column at any given time. A column with a WIP limit of three cannot have more
than three cards in it. When the column is “maxed-out” the team needs to swarm on those
cards and move them forward before new cards can move into that stage of the workflow.
These WIP limits are critical for exposing bottlenecks in the workflow and maximizing flow.
WIP limits give you an early warning sign that you committed to too much work.
 4. Commitment point — Kanban teams often have a backlog for their board. This is where
customers and teammates put ideas for projects that the team can pick up when they are
ready. The commitment point is the moment when an idea is picked up by the team and
work starts on the project.

5. Delivery point — The delivery point is the end of a kanban team’s workflow. For most
teams, the delivery point is when the product or service is in the hands of the customer. The
team’s goal is to take cards from the commitment point to the delivery point as fast as
possible. The elapsed time between the two is the called Lead Time. Kanban teams are
continuously improving to decrease their lead time as much as possible.

How to create a Kanban Board explained in 5 easy steps:

Step 1: Visualize your workflow

To create a Kanban Board, get a whiteboard, then break down the flow of work from the moment
you start it to when it's finished into distinctive steps and draw a column for each.

Step 2: Identify the types of work you do

Decide what kinds of work items you are usually working on. These may be, for example, customer
orders, support requests, or maintenance tasks. Assign a distinctive color to each of them, and get a
bunch of sticky notes in these colors.
Step 3: Write down tasks on cards and place them on the board
Write down each thing you are working on on a separate color-coded sticky note, and put it onto the
board into the respective column. The order of cards in each column should represent their relative
priority, with the most urgent ones at the top.

Step 4: Start working with your Kanban board

Work on tasks starting with the ones at the top. When a task is ready to be moved to the next
column, place it at its bottom. Such a method of working will help to maintain a high flow of work
on your board.
Step 5: Improve the flow of work
Kanban is all about maintaining a high and consistent flow of work. With your board, you should be
able to see the overview of work status and instantly identify any problems or bottlenecks. No work
item should lag behind, and columns should not be overloaded with tasks. The most straightforward
technique to ensure consistent flow is limiting work in progress.
Limiting Work In Progress means placing a limit (WIP limit) on the capacity of a column on a
Kanban Board. For example, you may decide that you should not be working on more than two
things at once. So once you have more than two items in a column, you stop accepting new ones
and focus all your efforts on getting at least one item from this overgrown column done first.
Limiting WIP helps to keep in check the number of unfinished things you have on your plate, before
accepting new ones. Keep in mind that Kanban Boards are part of a larger Kanban method, which
offers many other techniques to keep the work flowing.
Earned Value Analysis (EVA) —
A quantitative project management technique for evaluating project performance and predicting
final project results, based on comparing the progress and budget of work packages to planned work
and actual costs.
Allows the project manager to measure the amount of work actually performed on a project.
Project manager able to predict the total cost of a project and its completion date.
Allows the project manager to calculate the efficiency indices of the project.
It provides information on how the project is progressing in relation to its original planning.

Earned Value Definitions

Earned value analysis uses three key pieces of project information: the planned value, actual cost,
and earned value, which are shown in Exhibit 2 below. The first two terms are not new, they are the
plan spend curve and the actual cost expenditures curve many project teams have been using for
years.

Fig : Typical Graph Showing PV, EV, and AC.

Planned Value (PV) is the budgeted cost for the work scheduled to be done. This is the portion of
the project budget planned to be spent at any given point in time. This is also known as the
budgeted cost of work scheduled (BCWS).
Actual Costs (AC) is simply the money spent for the work accomplished. This is also known as the
actual cost of work performed (ACWP).
Earned Value (EV) is the percent of the total budget actually completed at a point in time. This is
also known as the budgeted cost of work performed (BCWP). EV is calculated by multiplying the
budget for an activity or work package by the percentage progress:
EV = % complete x budget
For example, if a Work Package is the installation of 500 new computers in an office, and 350
computers are installed, the Work Package progress is 70% complete (350/500). If the budget for
this Work Package is US$200,000, the earned value is US$140,000 (0.70 x $200,000).
An effective method to show the relationship between PV, EV, and AC is shown in Exhibit 3 below.
Exhibit 3 – Relationship of Earned Value Terms.
Earned Value Calculations
With the terms PV, EV, and AC defined, along with how to determine progress, some key
calculations can easily be done, which provide important information on how the project is doing.
The formulas for earned value calculations are:

• Cost Variance: CV = EV – AC • Cost Performance Index: CPI = EV/AC

• Schedule Variance: SV = EV – PV • Schedule Performance Index: SPI = EV/PV

Project Tracking

 Project tracking is a project management method used to track the progress of tasks in a
project. By tracking your project, you can compare actual to planned progress, and identify
issues that may prevent the project from staying on schedule and within budget.

 Project tracking helps project managers and stakeholders know what work has been done,
the resources that have been used to execute those tasks, and helps them create an earned
value analysis by measuring project variance and tracking milestones.

 Key to project tracking is the use of project tracking tools and project management
techniques.

 For example, a Gantt chart allow managers to track project progress by providing an
overview of tasks, workload and milestones at any point of the project life cycle. Other
types of project reports like status reports can gather extra details that provide further insight
into deliverables, risks and performance. This data can then be distributed to the project
team and stakeholders to keep them updated.
  Project Tracking is a method of project management for following the progress (or lack
thereof) of activities involved in projects.

 Potential issues can be spotted and solved by team members and leaders.

 Tracking projects from the beginning, dealing with problems quickly, and proactively
making decisions is what successful project managers do.

 Managing all tasks and activities involved, handling multiple files involved, and most
importantly, the people who make up the team make this incredibly challenging.
 Project tracking begins early in the project with planning and goes on until the completion
of a project.

 Monitoring project progress to identify potential problems in a timely manner and take
corrective action. Measuring project performance regularly to identify variances from the
project management plan to make sure projects are on track.

What Is a Project Tracker?

A project tracker is a tool that lets managers measure the progress of their team as they execute
tasks and use resources. It’s an essential tool to keeping projects on schedule and within their
budgets.

There are four key benefits that effective project tracking should deliver.
1. Real Time Information
 Firstly, stay up to date and get the most accurate information available.

 Everyone involved in the project needs to see the status and progress of the project in an
instant.

 This is crucial for senior management to make decisions at the top level of the project along
with team leaders on behalf of the team.

 Using cloud-based simple project management software, reporting to senior management

should be painless. By tracking projects, teams can be aligned, along with project objectives
and activities. Stay in touch and watch goals become reality.

2. Problem Identifiers
 With project tracking, there is no place for problems or issues to hide.

 Any budding issues are recognizable in an instant. This allows leaders to act and take back
control of the situation.
  Team members can offer assistance and keep each other motivated to get jobs done.

 Problem-solving maintains the structure of the project and allows resources to spend time on
the things that matter.

 Once the issues are gone, the project is back on track and success is on the horizon.

3. Team Motivation
 Collaboration is a key factor of every project. If every member has clarity on their role, they
can work toward the group objectives.

 As projects progress and the task list diminishes with every day, team motivation to carry on
and complete the project intensifies.

 By working together and creating an empowered team, project tracking keeps everyone in
the loop and on the same page.

4. Easy and Accurate Reporting

 Reporting is often a painful task that project managers are required to do.

 Senior management want an overall view of each of the projects in an instant.

 Using one system in order to manage and track projects makes reporting quick and simple.

 Time is valuable so having all information in one place with more detail available if needed,
perfect for reporting to senior executives.

What are the best ways to Track Projects effectively?

We all now know that project tracking is essential for progress and the end goal of accomplishment.
1. Plan your project before it starts

 The tendency to start the project by jumping in right away without doing the proper
preparation is a key reason why project tracking becomes difficult.

 By having plans and goals you can then know how the project is progressing.

 Things you need to have before you start a project; Objectives, task lists, team members,
duration, and possible issues.

 By having these things laid out from the very beginning, you can track any changes that you
have to make.
  These can change throughout the project but having initial information creates a baseline for
the project.

 If, you and the executives define the deliverables with clear outcomes that are measurable,
then you have a high-level framework of deliverables that lead to that result.

2. Look for warning signs & resolve issues

 The warning signs are the things that could make or break a project.

 If you do not witness any warning signs, your project is doomed to fail. Warning signs are
presented in Project Central for thing like the one tasks highlighted in red for due dates that
approaching.

 If there are many tasks that are not completed it may be an idea to get others involved.

 By checking these warning signs and resolving the issues quickly rather than letting them
fester and grow, you can get your project back on track!

3. Monitor work schedule

 Once the project is planned, execution of the work can begin.

 High-level deliverables can be broken down into smaller tasks providing clarity and
direction as to what is required from them. Therefore, knowing what a good job is before
they even start work.

 Reviewing the plan and tasks can determine how the project is going.

 Being proactive with the work involved in the projects ensures nothing slips through the
cracks that could prevent the project from being completed.

 Constant monitoring is of vital importance if you want to have a successful project. Having
a strict work schedule gives the team deadlines and goals to reach.

4. Only count tasks as complete when complete

 When progress is slow it can seem like a good idea to start ticking off tasks as being
complete when in fact, they are only partially complete.

 These false reports then make it difficult to see actual progress for the project.

 Some tasks may then be marked as complete which when it comes to the end of the project
are not actually done.
  It is best to be honest when progress is slow and to main a level of realistic reporting.

5. Be Realistic – Actuals and Estimates

 Creating a culture where people can be open and honest allows project estimates and
reporting to be accurate so you can measure progress against at regular checkpoints.

 Deadlines and budgets are often over ambitious and this causes project stress and ultimately
failure. Projects should be ran with a base of accurate, fact-based facts, rather than
misleading optimism that can arise from the fear of reporting bad news.

 Projects can only be ran effectively by knowing what is done and what is not.

6. Look to the Future

 Always look toward the future when tracking projects. Know that all the current activity is
all for the end goal in the future.

 After the project is completed, reflect on what worked and what did not. This information is
key to aid the tracking of future projects.

 Each project provides a key set of learnings to benefit future endeavours.

What Is a Project Status Report?

1. A project status report is a document that summarizes a project’s overall progress against
the projected project plan.

2. The goal of a project status report is to keep all stakeholders informed of progress, to
mitigate issues before they arise, and to ensure that the project will land within the
designated time frame.

3. A project status report helps to improve communication across an organization, as everyone

is kept in the loop on how the project is progressing. It also helps to simplify the
communication process with a single, formalized report that everyone can refer to to stay up
to date.

4. Project managers use status reports to keep stakeholders informed of progress and
monitor costs, risks, time and work. Project status reports allow project managers and
stakeholders to visualize project data through charts and graphs.
 5. Project status reports are taken repeatedly, throughout every phase of the project’s execution,
as a means to maintain your schedule and keep everyone on the same page.

The status report for a project will generally include the following:

 The work that’s been completed

 The plan for what will follow
 The summary of the project budget and schedule
 A list of action items
 Any issues and risks, and what’s being done about them

How to Write a Project Status Report

Writing a project status report is an essential project management task. Whether you generate one
weekly, monthly or quarterly, the steps are essentially the same. Here’s how to write a project status
report:

1. Determine the objective

2. Target your audience (Clients, team members, sponsors, etc)
3. Choose the format and type
4. Collect your data
5. Structure the report
6. Make sure it’s clear
7. Edit draft

Elements of a Project Status Report

The different elements of a project status report organize the different parts into a cohesive whole.
The objective of a status report, of course, is to keep stakeholders informed and expose areas of the
project that need greater organizational support.

General Project Info

 To start with, you’re going to need to just put down the basics.

 What is the project name? Who is the project manager? What are the number of resources?

 All this information is essential, if obvious, to track the paperwork.

General Status Info

 Again, you’re going to want to stamp the report with data that will distinguish it from the
deluge of reports that will be streaming into the project paperwork.

 So, here you want to include what date the report was generated, who the author is and so
on.

Milestone Review

 Milestones are the major phases of your project. They’re a good way to break up the larger
project into smaller, more digestible parts.

 The milestone review lets you note where you are in terms of meeting those milestones
(against where you planned to be at this point) in the project’s life cycle.

Project Summary

 One of the main purposes of the status report is to compare the project’s progress with the
project plan estimates.

 To do this, include a short summary of the forecasted completion date and costs of the
project. This allows project managers to control the project’s execution and measure
success.

 Be sure to include the activities that are facing issues and how those problems might impact
the project’s quality, resources, timeline and costs.

 Explain what you’re planning to do to resolve these issues and what the results will be once
you have fixed the problem.

Issues and Risks

 Risks are all the internal and external factors that are a threat to your project. They become
issues once they affect your project’s budget, timeline or scope. List the issues that have
arisen over the course of the project to date.

 What are they? How are you resolving them? What impact they’ll have on the overall
project?

 Apply the same questions to the risks that you’re aware of. Have they shown up? If they
have, what are you doing to get the project back on track?
Project Metrics

 It’s important to back your report up with hard numbers to prove the statements you’re
making. You should have established the metrics for status reporting during the project’s
planning phase.

 It’s impossible to know if your project is succeeding without measuring its effectiveness.
These metrics are a way to show you’re on track and evaluate what, if anything, needs
attention.

What is Change Control?

Change Control is the process that a company uses to document, identify and authorize changes
to an IT environment. It reduces the chances of unauthorized alterations, disruption and errors in the
system.

Different factors of Change Control process

There are various factors that a Change Control process should consider

Steps in Change Control

Action taken in Change Control
Process
 Request for changes should be standardized and subject
 Change request initiation
to management review
and Control
 Change requestor should be kept informed

 Make sure that all requests for change are assessed in a

 Impact Assessment
structured way for analyzing possible impacts

 A change log should be maintained that tells the date,

person details who made changes and changes
 Control and implemented
Documentation of  Only authorized individual should be able to make
Changes changes
 A process for rolling back to the previous version should
be identified

 Whenever system changes are implemented the

 Documentation and
procedures and associated document should update
Procedures
accordingly

 System access right should be controlled to avert

 Authorized Maintenance
unauthorized access

 Testing and User signoff  Software should be thoroughly tested

 Steps in Change Control
Action taken in Change Control
Process

 Control should be placed on production source code to

 Version Control
make sure that only the latest version is updated

 A verbal authorization should be obtained, and the

 Emergency Changes
change should be documented as soon as possible

Process of Change Control

Before we look into what is involved in Change Control process, we will get familiarize with what
documents are used in Change Control. While carrying out Change Control, there are mainly two
documents involved
 Change Log: A change log is a document that list the details about all the Change Requests
like project number, PCR (project change request) ID, priority, Owner details, Target date,
status and status date, raised by, date when raised etc.

Change Request Form: It is used to document details required to support the decision making
process like type of change, benefits of change, name of resource requesting the change, time and
estimate cost, priority of change, authorized person detail, change request status etc
Change Process Flow-Diagram
Change Process follows a specific pattern to implement the changes in the product or system. Here
through flow-diagram we explained what are the steps involved in the Change Process.
Steps for Change Control Action
 Change request  Identify the need for a change and describe it on the
identification project change request form

 If the change is not valid, it has to be deferred or rejected

 Determine appropriate resources required to analyze the
 Change request change request
assessment  Perform quick assessment of the potential impact and
update the change request form
 At this stage, rejected change request should stopped

 Change request analysis  For analysis assign the change request to an authorized
 Steps for Change Control Action
member
 Deferred change re-enter this analysis step
 At this stage, rejected change request should stopped

 Identify change risk and complexity level before approval

 Identify the impact level of the change before approval
 Change request approval  Review impact of Change Request to authorized person
for approval
 At this stage, rejected change request should stopped

 Update project procedure and management plans

 Inform about the changes to the team
 Change request
 Monitor progress of change request
implementation
 Record the completion of change request
 Close change request

Software Configuration Management

Software Configuration Management(SCM) is a process to systematically manage, organize, and
control the changes in the documents, codes, and other entities during the Software Development
Life Cycle.
The primary goal is to increase productivity with minimal mistakes.
SCM is part of cross-disciplinary field of configuration management and it can accurately
determine who made which revision.
The primary reasons for Implementing Technical Software Configuration Management System are:
There are multiple people working on software which is continually updating

• It may be a case where multiple version, branches, authors are involved in a software config
project, and the team is geographically distributed and works concurrently
• Changes in user requirement, policy, budget, schedule need to be accommodated.
• Software should able to run on various machines and Operating Systems
• Helps to develop coordination among stakeholders
• SCM process is also beneficial to control the costs involved in making changes to a system
 changes in
business requirements
changes in
technical requirements
changes in
other
user requirements documents

software models
Project
Plan
data
Tests
code
Tasks in SCM process
• Configuration Identification
• Baselines
• Change Control
• Configuration Status Accounting
• Configuration Audits and Reviews

Configuration Identification:

Configuration identification is a method of determining the scope of the software system. With the
help of this step, you can manage or control something even if you don’t know what it is. It is a
description that contains the CSCI type (Computer Software Configuration Item), a project
identifier and version information.
Activities during this process:
• Identification of configuration Items like source code modules, test case, and requirements
specification.
• Identification of each CSCI in the SCM repository, by using an object-oriented approach
• The process starts with basic objects which are grouped into aggregate objects. Details of
what, why, when and by whom changes in the test are made
• Every object has its own features that identify its name that is explicit to all other objects
• List of resources required such as the document, the file, tools, etc.
Example:
Instead of naming a File login.php its should be named login_v1.2.php where v1.2 stands for the
version number of the file
Instead of naming folder “Code” it should be named “Code_D” where D represents code should be
backed up daily.

Baseline:
A baseline is a formally accepted version of a software configuration item. It is designated and fixed
at a specific time while conducting the SCM process. It can only be changed through formal change
control procedures.
Activities during this process:
• Facilitate construction of various versions of an application
• Defining and determining mechanisms for managing various versions of these work
products
• The functional baseline corresponds to the reviewed system requirements
• Widely used baselines include functional, developmental, and product baselines
In simple words, baseline means ready for release.
Change Control:
Change control is a procedural method which ensures quality and consistency when changes are
made in the configuration object. In this step, the change request is submitted to software
configuration manager.
Activities during this process:
• Control ad-hoc change to build stable software development environment. Changes are
committed to the repository
• The request will be checked based on the technical merit, possible side effects and overall
impact on other configuration objects.
• It manages changes and making configuration items available during the software lifecycle

Configuration Status Accounting:

Configuration status accounting tracks each release during the SCM process. This stage involves
tracking what each version has and the changes that lead to this version.
Activities during this process:
• Keeps a record of all the changes made to the previous baseline to reach a new baseline
• Identify all items to define the software configuration
• Monitor status of change requests
• Complete listing of all changes since the last baseline
• Allows tracking of progress to next baseline
• Allows to check previous releases/versions to be extracted for testing

Configuration Audits and Reviews:

Software Configuration audits verify that all the software product satisfies the baseline needs. It
ensures that what is built is what is delivered.
Activities during this process:
• Configuration auditing is conducted by auditors by checking that defined processes are
being followed and ensuring that the SCM goals are satisfied.
• To verify compliance with configuration control standards. auditing and reporting the
changes made
• SCM audits also ensure that traceability is maintained during the process.
• Ensures that changes made to a baseline comply with the configuration status reports
• Validation of completeness and consistency
Participant of SCM process:

Following are the key participants in SCM

1. Configuration Manager
• Configuration Manager is the head who is Responsible for identifying configuration items.
• CM ensures team follows the SCM process
• He/She needs to approve or reject change requests
2. Developer
• The developer needs to change the code as per standard development activities or change
requests. He is responsible for maintaining configuration of code.
• The developer should check the changes and resolves conflicts
3. Auditor
• The auditor is responsible for SCM audits and reviews.
• Need to ensure the consistency and completeness of release.
4. Project Manager:
• Ensure that the product is developed within a certain time frame
• Monitors the progress of development and recognizes issues in the SCM process
• Generate reports about the status of the software system
• Make sure that processes and policies are followed for creating, changing, and testing
5. User
The end user should understand the key SCM terms to ensure he has the latest version of the
software
Fixed Price Contracts

With fixed price contracts, also known as lump sum contracts, the buyer and service provider agree
on a fixed price for the services in question. This type of contract is low-risk for the buyer, but high-
risk for the seller since the time and costs of the project could exceed the fixed price. For this
reason, a fixed price contract should include a detailed scope of work that clearly outlines what the
buyer can expect for the agreed-upon price. When the contract is signed, the seller must complete
the task or deliver the goods as agreed or risk being in breach of contract. Types of fixed price
contracts include the following:
• Firm Fixed Price Contracts: This type of fixed price contract is typically used in
government and partial government projects where the scope is defined in detail. This makes
it easy to create a request for proposals and to compare the bids you receive. The downside
for this contract is that deviating from the defined scope can be expensive.
• Fixed Price Incentive Fee Contracts: With this type of fixed price contract, the buyer also
offers a performance-based incentive as an extra payment to the seller. Performance can be
measured for this purpose by various metrics, including time, cost, or performance.
• Fixed Price Award Fee Contracts: As with the fixed price incentive fee, this type of
contract offers a bonus for exceeding a specific performance metric. For example, if the
seller delivers the product early, he or she could be eligible for a bonus equal to 10 percent
of the total contract.
• Fixed Price With Economic Price Adjustment: With this type of contract, although the
price is fixed, it can be readjusted with fluctuations in the market.
Fixed price contracts are commonly used on a deliverables basis for outsourcing and turnkey
procurement.

Purchase Orders
A purchase order is a specific type of contract that is used only to purchase goods and commodities.

Cost Reimbursable Contract

When the scope of a project is unclear or subject to change, you should consider a cost reimbursable
contract. This document, sometimes called cost disbursable, is also useful when the risk of a
specific project is high. The seller provides work for a fixed time period or project, then increases
the bill to create profit after finishing the work.
The amount of profit in this type of contract is often based on performance metrics detailed in the
document itself. The downside of this type of contract lies with the buyer, who carries the risk for
this type of contract since he or she pays all costs. The full cost of the contract won't be defined
until the work is done. For this reason, few businesses opt to use a cost reimbursable contract.
Types of cost reimbursable contracts include the following:
• Cost Plus Percentage of Costs/Cost Plus Fee: With this variation, the seller receives a
defined percentage of the total cost of the project upon completion. This is also an
arrangement that mainly benefits the seller.
• Cost Plus Fixed Fee: The seller receives costs incurred plus an additional flat fee that is
fixed in the contract. This amount is received when the contract is fulfilled regardless of
performance.
 • Cost Plus Incentive Fee: This is a performance-based fee paid on top of actual costs. It is a
flat amount rather than a percentage.
• Cost Plus Award Fee: Similar to a cost plus incentive fee, this contract provides an award
on top of the costs incurred.

Unit Price Contract

This type of contract, also called an hourly rate contract, combines elements of fixed price and cost
contracts. A unit price contract pays a specified hourly rate for every hour spent on the project. It is
commonly used by freelancer workers.

Time and Materials Contract

This contract is used when labor is the main deliverable and typically provides the seller an hourly
rate.
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