Which of the following statements is not true about incentive arrangements in contracts?
A) Used to motivate the supplier to control costs
B) Used to encourage good supplier performance
C) Contract price will usually be lower
D) Ceiling price is usually fixed during negotiations
E) Cost responsibility is usually shared

Question

Quizplus · Accepted Answer

Incentive arrangements in contracts are designed to motivate suppliers to control costs, encourage good performance, and often involve a shared cost responsibility with a ceiling price fixed during negotiations. They do not necessarily mean the contract price will be lower; instead, they focus on performance and cost efficiency.

Which of the Following Statements Is Not True About Incentive