Question
As part of you work for an owner, you are trying to determine a mechanism for selecting the cheapest bid. The scope of your project
As part of you work for an owner, you are trying to determine a mechanism for selecting the cheapest bid. The scope of your project lends itself into a remeasurable type contract. You managed to convince your manager to proceed with this type of contract. However, she would like to ensure that there is an incentive for the contractor to minimize the actual costs. As such, she insists that there is not only a cap/ceiling on the bid, but also a risk/profit sharing agreement. The terms of this agreement state that the contractor will gain or lose a percentage (referred to as "p") of any profit or loss measured relative to the "cap" which is set by the client. Express the total estimated cost provided by a contractor as a function of "cap", "p", individual unit prices "UPi", quantities "Qi", and any other variable you might need (i an index referring to package i, there is a total of n packages).
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