project pricing

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.

Essentially, a distinction can be made between three different pricing models:
Fixed price model:

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.

Time and material price model:

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.

Milestone based pricing model:

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.