A target contract is a form of contract where both the owner and contractor agree on a target cost,
and both parties share any cost savings or overruns. This contract type encourages efficiency but has
some drawbacks.
Key Points:
Disadvantages of Target Contracts:
No Competitive Bidding for Targets: The target cost is typically negotiated rather than competitively
bid, which could lead to less competitive pricing.
Other Points: While target contracts encourage timely and economical completion and allow for
early start and flexibility, the lack of competitive bidding for the targets can be a significant
disadvantage.
Conclusion: The correct answer is B. No opportunity to competitively bid the targets because this is a
specific disadvantage associated with target contracts.
