Primary Government Contract Types

There are three primary types of government contracts: fixed price, cost reimbursable and time and materials. Fixed price contracts have a negotiated price that remains the same over the life of the contract so the amount you will be paid remains the same. Cost reimbursable contracts involve the government paying for the actual cost to complete the work. Cost reimbursable contracts have a variety of schemes for providing a fee or profit to the contractor. Time and materials contracts have agreed to rates for labor and materials that do not change over the contract and are billed as incurred. Time and materials contracts can have annual escalation rates incorporated in them to reflect increasing costs. Cost Plus Incentive Fee (CPIF) A cost plus incentive fee contract is one where the vendor is reimbursed for costs incurred plus fee based on a formula tied to costs. The fee formula can vary and is normally designed to encourage the contractor to keep costs down. Cost Plus Award Fee (CPAF) A cost reimbursement contract where the objectives of the contract are determined to be completed by subjective means. The contractor receives reimbursement for their costs plus the award fee. Cost plus award fee contracts can not be used when cost plus fixed fee or cost plus incentive fee contract would be more appropriate. Cost Plus Fixed Fee (CPFF) A cost plus fixed fee contract reimburses the contractor for the cost incurred to complete the work plus a negotiated fixed fee. The fee does not change based on cost of the work. Cost is calculated based on actual amounts paid for labor and materials plus fringes, overhead and general and administrative rates. Fringe, overhead and general and administrative rates are computed annually and reflect the actual corporate costs. Many government contracts are cost reimbursable. Firm Fixed Price or FFP contracts have detailed requirements and a price for the work. The price is negotiated before the contract is finalized and does not vary even if the contractor needs to expend more or less resources than planned. Firm fixed price contracts require the contractor to manage the costs of the work in order to make a profit. If more work than planned is required then the contractor may lose money on the contract unless a contract modification is obtained. Firm fixed price contracts can also be more profitable if costs are closely managed. Fixed Price Contract With Incentive Fee Target (FPIF) The fixed price contract with incentive fee contract is a firm fixed price type contract (as compared to a cost reimbursable). The fee can vary depending on whether the contract comes in above or below planned cost. These contracts do contain a ceiling price to limit the government’s exposure to cost overruns. Fixed Price With Economic Price Adjustment Fixed price with economic price adjustment contracts are fixed price contracts but they contain a provision to account for contingencies and changing costs. An example is the contract may contain an adjustment for an annual salary increase. Time Materials contracts have rates negotiated before contract award for the cost by labor category and materials. As work is completed the contractor bills against the rates agreed to in the contract regardless of the actual cost. Know which contract type is planned in advance of submitting a proposal as well as during contract negotiations. Knowing the contract type allows you to plan the project and how best to manage it for success. Before a company can get a cost reimbursable contract it must have an approved accounting system.

Capital Structure And The Performance Of Firm Free Essay Example, 4500 words

2.3.1 Theory of Net Income (NI)The theory of net income states that there prevails a connection between firm s value and capital structure. A company s capital structure influences its WACC and therefore directly has an impact on the firm s value. The assumptions of net income approach are: It believes that an incessant augmentation in debt generally does not impact the investors risk perception. Cost/price of equity is more than the debt s cost. The tax on the corporate income does not exist. As per this approach, more utilisation of the debt capital causes lessening of WACC. This results in the increased value of the company. When the WACC is decreased and EBIT remains constant, then the worth of company always increase. Therefore, this approach states that a company will have utmost value when WACC will be at its minimum i. e. at the time when the company is nearly debt-financed. If the theory is valid, then the average is considered as an important variable and the financing decisions will also have the considerable effect on firm s valuation (Booth et al, 2001). 2.3.2 Theory of Net Operating Income (NOI)This approach is just reverse of the NI approach. We will write a custom essay sample on Capital Structure And The Performance Of Firm or any topic specifically for you Only $17.96 $11.86/page Assumptions of this theory are: WACC always remains stable and it relies on business risk. The value of the company is estimated using WACC only. Cost/price of debt also remains stable. The tax on the corporate income does not exist.

Cultural Difference Hofstede Framework Free Essays

Culture, in my own opinion, is a unique system of values and norms that are believed by a group of people who live in the same society. Since culture is unique, Geert Hofstede tried to study the differences. After the study, he proposed five dimensions to measure the cultural difference between nations. We will write a custom essay sample on Cultural Difference: Hofstede Framework or any similar topic only for you Order Now The following parts will explain Hofstede Framework briefly. The first dimension is Power Distance. It is a tool to measure the power difference between levels in organization. In a group with high power distance, the majority of people would tend to respect in authority and establish hierarchy. When observing their behavior, they would have a great esteem on the class of social level. By contrary, a society with a low power distance would not fear authority and view themselves as equal with equal rights. Generally, the power distance in Oriental is higher than that in Occidental. The second dimension is Individualism vs. Collectivism. This index measures the preference of a group of people in considering self-benefit or group-benefit. In a society of collectivism, the society would have strong group cohesion and have higher responsibility on others well-being. Besides, the management level would tend to discuss with their subordinates before making a decision. By contrary, people will have loose ties and lack of interpersonal connection when a society prefers individualism. Generally, the Oriental prefer to focus on collectivism; the Occidental prefer to focus on the individualism. The third dimension is Achievement vs. Nurturing. This index reflects a society that sticks with and values traditional male and female roles. If the score is high, the society tends to holes value like traditionally male which is competitive, assertive and ambitious. They would be less emotional and would not make any emotional-based decision or argument. On the other hand, a nurturing-oriented society will respect and admired powerful women and they would tend to emphasizing consideration and personal feelings. Next dimension is Uncertainty Avoidance. The score reflects the attitude of the group when it faced risk and ambiguity. If the score of uncertainty avoidance is high, the management of the group would prefer to set more rules to avoid the uncertainty situation during the daily operation. By contrary, society with low score has higher illingness in accepting risk and changes. Also, the management of the group would impose less rules and structure when unnecessary. The last one is Long-term vs. Short-term Orientation. It measures the group of people prefer to consider the short-term-benefit or the long-term-benefit. If the group prefers short-term-benefit means the management may seek for the quick success and the instant benefits. They would consider personal stability and respect fro tradition. By contrary, the group prefers long-term-benefit means they concern the future, advocate saving and reserve. They believe that progressive effect is more important. With the Hofstede framework, we can separate and understand the difference of managing culture through these five dimensions. On the other hand, when we talk abou Culture†, somebody would say that â€Å"Culture is something easy to build up, but hard to break†. However, in my opinion, this is not a one-sided statement. We would not state that culture is either easy or difficult to build up or break down, as we could adopt a new cultural environment or re-build a culture in a micro-environment by nderstanding the cultural norms and behavior of that society. For example, to change the beliefs and values in an organization, we should adopt different approaches based on the culture in that nation. I would explain my contention using the Hofstede’s framework in the following parts. The first angle is Power Distance. The majority of people would obey their boss if the index is high. By contrary, they would view themselves as equal with equal rights. For this, there are two different reactions when they meet the change of culture, included buildup and break down. From the angle of higher-index nation, they will accept the changes always; most likely they will not refuse the changes, include the break down. So, management can change the culture easily in this situation. However, in the low-index nation, it will not only hard to build up, but also hard to break down the culture as they emphasize to view themselves as equal with equal, especially to rebuild. Therefore, management should follow these three advices when they change to culture. Firstly, form a discuss group and invite staff to show their views and concern before decision making. Secondly, try to use more statistics to seek their support within the discussion. The most important is the management must keep the eyes on the behaviors and emotion of the staff the change started. If the negative reaction was found, the management should stop the change and review. If the management follows it, it is easy to change the culture. The second angle is Individualism vs. Collectivism. As the said before, the society would have strong group concept if there is Collectivism. On the other hand, they would emphasize the self-benefit when they prefer Individualism. For this, the main focus should be â€Å"Benefit†, there are two different reactions when they meet the change of culture. In the Individualism society, â€Å"Self-Benefit† is their main focus. If changing the culture will bring the â€Å"Self-Benefit†, they will support the change. Then, Culture is something easy to build up and break down. However, if changing the culture will cut the â€Å"Self- Benefit† down, they will against the change. Then, Culture is something hard to build up and break down. By contrary, in the Collectivism society, â€Å"Group-Benefit† is their main focus. If changing the culture will advantage to â€Å"Group-Benefit†, they will support the change. So, Culture is something easy to build up and break down in this moment. However, if changing the culture is disadvantage to â€Å"Group-Benefit†, they will against the change. Then, Culture is something hard to build up and break down in this moment. As a role of management, we should try to guide them to focus the viewpoint to positive. For example, when we would like to change the culture of late, some supporter of the Individualism may think it is damage to their â€Å"Self-Benefit†. But e should change their mind-set to it is benefit for them, it is a chance for strive to the promotion. For the support of Collectivism, we also can try a similar approach. For example, when we would like to change the culture of talking gossip, some supporter of the Collectivism may think it is damage to their â€Å"Group-Benefit†. We should change their mind-set to it is advantage to tor them; it will be increase to productivity atter stop to talking. All of them can get the team bonus if the productivity increases. Try to divert their attention and get their support, then the change of culture will easier. If we can not divert their attention, the management should stop the change and review it immediately. The next angle is Achievement vs. Nurturing. If the score is high, the group of people will more competitive, assertive and ambitious. However, they would tend to emphasizing consideration and personal feelings if the score is low. In this situation, they will only support the change if it is fit with their character and oppose it if it can not. After we got their support, we can change the culture easily. But, it is hard to change the culture if we only got their objection. In the Achievement society, we should avoid discussing emotions or making emotionally-based decisions or arguments. By contrary, Ensure Job design and practices are not discriminatory to either gender. And treat men and women equally. By doing so, we will build up or break down easily. When we go the wrong way, then we will hard to build up and break down. The fourth angle is Uncertainty Avoidance. The group would prefer to set more rules if the score of uncertainty avoidance is high. If the score of uncertainty avoidance is low, they have higher willingness in accepting risk. If the score of uncertainty avoidance is low, that means they love to support the change of culture, it is easy to rebuild and break down the culture. On the other hand, they are not the fans of the change if the score of uncertainty avoidance is high, because they have not confidence for the future. For this, we should give more plans and preparation to the staff, communicate with them often and early, provide detailed plans of change. Through the guide line, we can lead the people to rebuild or break the culture step-by-step. After that, they will support the change as they got he confidence. The last angle is Long-term vs. Short-term Orientation. If the group prefers short- term-benefit means the management may seek for the quick success and the instant benefits. By contrary, the group prefers long-term-benefit means they believe that progressive effect is more important. In Long-term society, we should avoid letting them lose the face, emphasize and benefit of future, then they will support. Otherwise they will oppose the change. By contrary, in Short-term society, we should emphasize the quick benefit, then they will support. Otherwise they will oppose the change. How to cite Cultural Difference: Hofstede Framework, Papers

History of Economics And Globalisation

Question: Discuss about the History of Economics And Globalisation. Answer: The paper majorly focused on history of economics and globalization. It also delved in how globalization affects countries as well as companies in their pursuit of market expansion and profitability. Countries or industries that benefit most from globalization and the ones lag behind were also evaluated. In the first instance, globalization was defined as a process that requires high level of response as well as participation of every nation globally alongside their population. It was clear that globalization has resulted from the cultural belies as well as practices that have to be accepted by every participant. A general acceptance of the policies established as well as formulas of implementation alongside challenges which a nation experience are key drivers of globalization. Globalization has also resulted from the strategic plan which transforms people with a range of social backgrounds as well as cultural beliefs. The degree of change, the impact of such a change on cultural pra ctices as well as the cost and benefit drawn from these changes explains the history of globalization. However, it was also noted that the period between the creation of policies and the response of people to these policies are barriers to globalization. Accordingly, global economics has resulted from the interaction of nations through commercial activities such as trade of services and goods where the exchange is embedded majorly through investments and flows of money. In the second instance, globalization was found to have great impacts on the countries as well as companies in their pursuit of market expansion and profitability. It was noted that a globalization affects both entities through trade which has to adapt to the international market dynamics for competitiveness and relevance within a business environment. With globalization, the changing market dynamics are faster and hence business organization have to undertake more research and development to remain relevance. Global ization also affects these firms and countries by bringing together diverse cultures in the international business market which has a greater impact on the erosion of culture. Increased levels of competitions by firms, advantaged information transfer and exchange of technology are some of the key trends through which globalization affects these firms and companies. In the last instance, it was concluded that globalization benefits developed countries over developing countries making the LDCs to lag behind. It was clear that developed countries have adequate funds to invest in the LDCs and get the ready market in these countries to remit back the profits at the expense of developing countries that lack the large amount of capital needed for such huge or capital intensive investment. Through the globalization, the developed countries have become richer and richer at the expense of the developing countries and hence LDCs have lagged behind. Introduction Research on History of Economics and Globalisation A capital market is a market where the government, local authorities and the industries act as the source of long term capital through banks, insurance companies, pension funds and private investors. A developed country is distinguished from, and industrial country using the presence and sophistication of their capital markets in which capital markets is either missing or dormant in developing countries. The rapid growth of the global capital market is mainly linked to the increase in privatizations from below 5 percent in the 1975s to around 20 percent at present. Globalization is a process that requires high level of response and participation of every nation across the world and her population. For the process to succeed there must be general acceptance of the policies created, formulas of implementation and challenges that countries may experience. In other word, the strategic plan to transform people with diverse social backgrounds and different cultural beliefs and practices must be accepted by every participant. The areas to focus on when determining how diversity in cultural practices affect the process of globalization entail the degree of change, the impact of such a change on cultural practices, the cost to the community as well as the benefit derived from the imposed change. Is essence, it becomes very hard for a particular community to detach from her regular cultural practices and respond instantly to certain regulations imposed by a foreign authority. The time overlap from the period of policy creation to the time people respond to such policies derails the process of globalization. Main Body of the Essay How is Globalization affecting countries and companies in their pursuit of market expansion or profitability? Global trade increasingly adapts to the international market dynamics to ensure its competitiveness and relevance within the business environment (Twarowska and KƦkol 2013, p. 65). Business organizations and other firms should therefore put more cash in research work to change with the changing market dynamics. This is to ensure that the firms have competitive advantage in the market. To ensure effective research is done, all stakeholders including the producers, suppliers, retailers and the consumers must be involved for rational decisions. (Hendee 2010, p. 34)). Globalization brings together diverse cultures together in the international business markets. This has greater impact on the erosion of culture due to the interacting diverse culture. (Northrup, D., 2015, p. 52). Relatively, some firms benefit more from globalization than others do, the same explains why some nations are more competitive over other nations in certain industries (Hendee 2010, p. 63). To understan d how globalization impacts the pursuit for marketing, it is crucial to identify the dynamics of global competition and nature of global industries. The key areas to be identified under the limelight of globalization include, efficiency, this can be achieved by firms through exploitation of another countries resource (Twarowska and KƦkol 2013, p. 69). In addition, companies can try out extending the productive life cycle of products. Some of the areas that growing trends of globalization have impacted in terms of profitability include: Increased levels of competitions by firms In this situation, if a company is capable of production at a low cost, it is possible to increase its market share in return (Bardhan 2006, p. 45). Advantaged Information transfer Consequently, the rapid changes in our markets require additional levels of information transfer. However, it is important for the shared knowledge to be implemented or rather to be put in an active rather than a passive situation (Serrano, 2007). Exchange of technology The developments that have been associated with technology are countless hence it is one of the most credit areas of advancements. Internationally oriented firms employ the use of technology to exploit new business opportunities (Muhammad 2011, p. 39). Technology is also a very significant tools for firms in their pursuit for quality goods and services. Which Countries/Industries Benefit Most from Globalization and which ones lag Behind? Arvydas Guogis, from Romeris University, has attempted to tackle the dilemma behind the big range of countries which benefit from globalization at the expense of others. The objectives behind this phenomena cuts across several crucial areas that this section will examine (Cavusgil 1993, p. 54). A common question that is usually pegged in most arguments surrounding globalization include, who exactly should take accountability for the positive and negative effects of globalization (Bertucci and Alberti 2003, p. 76). While some argue in terms of the specific roles played by countries, some counter argument base this effects on particular groups of interests i.e. making it the centre of political decision making. It is true to say that globalization is playing an increasing significant role in the development of developing countries (Nayyar 2006, p. 75). Consequently, globalization can be credited for several achievements in the economic processes, political influences, health systems an d technological developments. Subsequently, it is also true to argue out that all the effects of this phenomenon are positive. As a result, this section of the paper will comprehensively cover which countries in particular benefit more from it and in what ways they do. (Makhlouf 2014, p. 59). Although it may seem that they are the least beneficiaries of globalization, developing countries are now capable of coping with the rest of the world, increasing their economic growth and in solving poverty related cases in their country (Cavusgil 1993, p. 65). The World Bank and International Management have also impacted the effectiveness of globalization through encouraging developing countries to apply market reforms and changes through large loans (Mussa 2003, p. 53). It is also through globalization that developed countries are able to invest in the developing nations and as a result creating tremendous job opportunities for many people. True to say, the relationship between developed countries and developing countries has been enhanced because of the interdependency of the two (Zhang and London 2011, p. 58). It is important however to identify that as much as many developing countries share in the benefits of globalization, several other countries lag behind and also share in the negative impacts of the same (Bertucci and Alberti 2003, p. 54). Conversely, globalization has through the years ensured that the rich get richer and the poor either maintain their position or get poorer (O'Rourke and Williamson 2002, p. 67). This explains why, developed countries benefits most from the growing trend in globalization. In the same perspective, developed countries in most cases set up industries in developing countries so as to take advantage of the availability of low wages. As a result, this causes pollution in most countries with poor pollution regulation (Mussa 2003, p. 87). Another controversial issue surrounding globalization is the concept of brain drain. Consequently, priorities in developed countries lowers the productivity of other poor and developing countries (Bardhan 2006, p. 65). To sum all this up, many poor nations suffer at the expense of globalization due to the fact that it is as a result of foreign businesses utilizing the availability of lowe r wages rates as compared to their own (Nayyar 2003, p. 54). Conclusions In conclusion, the history of economics and globalization, how countries and companies are effected by globalization as well as and the most beneficiaries and victims of globalization have been discussed. The discussion has shown that globalization resulted from the cultural beliefs as well as practices that have to be accepted by every participant. Movements of people in and out of countries alongside their goods has fuelled globalization. The globalisation was noted to effect the countries and industries in pursuit of profitability and market expansion through increased technological exchange, advanced transfer of information as well as increased competition among firms. With globalization, it was clear that the word had become a global village and hence traders had to understand diverse cultural beliefs and values to expand their market and increase profits. It was also concluded that developed countries are the major beneficiaries of globalization leaving behind the LDCs to lag b ehind. The major reason for this linked to the availability of huge capital in the developed countries to invest in the LDCs. References Bardhan, P., 2006. Does globalization help or hurt the world's poor?. Scientific American, 294(4), pp.84-91. Bertucci, G. and Alberti, A., 2003. Globalization and the Role of the State: Challenges and Perspectives. Reinventing Government for the Twenty-First Century, State Capacity in a Globalizing Society/Rondinelli DA, Cheema G. Shabbir (editors).Westport, Connecticut (USA): Kumarian Press Inc, pp.17-31. Cavusgil, S.T., 1993. Globalization of markets and its impact on domestic institutions. Indiana Journal of Global Legal Studies, pp.83-99. Hendee, J.G., 2010. Profitable Globalization and the Ethical Dilemma of US Job Loss. McNair Scholars Research Journal, 1(1), p.7. Makhlouf, H.H., 2014. Facets of Globalization. International Journal of Business and Social Science, 5(1). Muhammad, A.C., Faheem, M.A., Dost, M.K.B. and Abdullah, I., 2011. Globalization and its impacts on the world economic development. International Journal of Business and Social Science, 2(23). Mussa, M., 2003. Meeting the challenges of globalisation. Journal of African Economies, 12(suppl 1), pp.14-34. Nayyar, D., 2003. Globalization and development. Rethinking development economics, 1, p.61. Nayyar, D., 2006. Globalisation, history and development: a tale of two centuries. Cambridge journal of economics, 30(1), pp.137-159. Northrup, D., 2015. Globalization in Historical Perspective. World System History, https://www. eolss. net/sample-chapters/c04/e6-94-16. pdf,(19.04. 2015). O'Rourke, K.H. and Williamson, J.G., 2002. When did globalisation begin?. European Review of Economic History, 6(1), pp.23-50. Serrano, M.., 2007. Phase transition in the globalization of trade. Journal of Statistical Mechanics: Theory and Experiment, 2007(01), p.L01002. Twarowska, K. and KƦkol, M., 2013. International Business Strategy-reasons and forms of expansion into foreign markets. Poland: Maria Curie-SkÅ‚odowska University, p.55. Zhang, P. and London, K., 2011, August. Does Globalization Benefit Developed or Developing Country?Case Studies on Chinese and Australian Construction Industry. In International Conference on Advances in Education and Management (pp. 83-90). Springer Berlin Heidelberg.