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What are some common misconceptions about PFP contracts?

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10 Posted

What are some common misconceptions about PFP contracts?

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10

PFP contracts are new in Pennsylvania for USTIF work and so there are a variety of misconceptions out there about this type of contract. Misconception 1: The contractor will not be able to make a profit under a PFP contract. A contractor has the opportunity to make an even greater profit under a PFP contract than under a T&M contract because the contractor assumes some of the risk of the cleanup. Contractors are making good profits under PFP terms because PFP frees them to manage their sites more efficiently, lowers paperwork costs, allows the contractor to purchase equipment that can be re-used on other jobs, and the government is able to pay the contractor in a more timely manner. In fact PFP contractors in pioneering states are generally doing quite well and most are looking for more PFP business. Misconception 2: The contractor assumes all of the risk under a PFP cleanup, and there is no way to minimize this risk. There are several ways contractors reduce their business risk when i

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