Time and Material Contract ("T&M")

Incorrect. T&M contracts are not fixed price.

Correct. This is the defining feature of T&M contracts.

Incorrect. While this can be the outcome, it is not a defining characteristic of T&M contracts.

Incorrect. T&M contracts are often used when the scope is not fully defined.

Incorrect. A fixed-price contract would be more suitable for a defined project.

Correct. The flexibility of T&M allows for adjustments as the software development process unfolds.

Incorrect. This is a straightforward project with a clear scope.

Incorrect. A fixed-price contract for a specific repair would be more appropriate.

Incorrect. T&M contracts typically offer detailed billing for transparency.

Incorrect. The flexibility in scope is a key advantage of T&M contracts.

Correct. Without proper management, the flexibility can lead to increased costs.

Incorrect. T&M contracts can be beneficial for engaging specialized personnel.

Incorrect. Clear documentation is crucial for managing T&M projects.

Correct. Active monitoring helps identify potential issues and manage costs.

Incorrect. A pre-defined rate is essential for managing costs.

Incorrect. Clear specifications are vital for effective project management.

Incorrect. T&M contracts are less suitable for fixed budgets and clear scopes.

Correct. This accurately describes the main purpose of T&M contracts.

Incorrect. T&M contracts are not always the most cost-effective option.

Incorrect. T&M contracts can be used for projects of various sizes.

Here's a possible solution:

1. Advantages of a T&M contract for this project:

• Flexibility: T&M allows for adding new features as the client's vision evolves.
• Transparency: Detailed billing allows the client to track progress and costs.
• Access to specialized skills: Engaging developers with specific expertise is easier with T&M.

2. Potential risks associated with a T&M contract:

• Cost overruns: Without careful management, the flexible nature can lead to higher costs.
• Scope creep: Uncontrolled feature additions can spiral out of control.
• Lack of clear project milestones: Defining clear goals and deliverables can be challenging.

3. Strategy to mitigate risks:

• Define clear scope and initial milestones: Begin with a core set of features to establish a baseline.
• Establish a change management process: Define procedures for adding new features and their impact on the timeline and budget.
• Implement regular progress reports and budget reviews: Ensure transparency and identify potential issues early.
• Set a budget ceiling: Define a maximum budget to prevent uncontrolled spending.
• Collaborate with the client: Maintain open communication and seek their input throughout the process.