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PASS THROUGH & FIXED CONTRACTS

It is important to ascertain the needs of your organisation when selecting a contract because both contracts have their advantages and disadvantages:

FIXED

ADVANTAGESDISADVANTAGES
Budget certaintyRisk premiums are built-in
Clear simple BillingNot transparent
Easier to forecast spendNo advantage from lower third part costs
Protected against legislative changesUnsuitable for dynamic response products
Easy to manageLimiting benefits for demand management

PASS-THROUGH

ADVANTAGESDISADVANTAGES
Greater transparencyRisk of higher third party charges
Benefit from actual third party chargesComplex billing
No Risk PremiumCosts are not secured
Able to take advantage of triad avoidanceCommonly miss-sold
Suitable for dynamic response productsBudget forecasting difficulties