Who determines the maximum allowable cost when using the Total Cost field in a contract?

Study for the Maximo Certification Test. Maximo offers comprehensive training programs for asset management solutions. Prepare with flashcards and multiple choice questions, each with hints and explanations to boost your exam performance.

The maximum allowable cost in a contract is determined by the organization itself. This is because the organization sets its own budgetary constraints and operational limits based on its financial position, project requirements, and funding availability. By establishing the maximum allowable cost, the organization ensures that it can manage its resources effectively and remain within budget.

The purchasing agent and financial officer may play roles in developing cost estimates and overseeing budgetary compliance, but the ultimate authority to set the maximum allowable cost lies with the organization. This allows the organization to align its contracts with its overall financial strategy and operational goals.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy