Project Pricing is the procedure for determining the price of complex projects.
In industries such as mechanical and plant engineering, individual stand-alone solutions are not uncommon, but rather the rule. Due to the lack of reference prices in the market, the provider is faced with the central challenge of pricing. A frame of reference can be costs and expenses incurred.
The project price consists of the calculated costs including a surcharge calculated by the provider. This approach is suitable if project requirements are clearly defined and the risk of unforeseen events is low.
The project price consists of the actual labor and material costs incurred. This pricing model is particularly suitable for projects that involve a high degree of individualization, high flexibility and thus a risk that cannot be conclusively calculated by the provider.
The cumulative project price is made up of the costs incurred for individual predefined sub-projects, so-called milestones. By dividing the overall project into several sections, any risks arising for both the provider and the customer can be minimized.