Pass Through & Fixed Contracts

It is important to ascertain the needs of your organisation when selecting a pass through or fixed contract because both contracts have their advantages and disadvantages.

Fixed

Advantages	Disadvantages
Budget certainty	Risk premiums are built-in
Clear simple Billing	Not transparent
Easier to forecast spend	No advantage from lower third part costs
Protected against legislative changes	Unsuitable for dynamic response products
Easy to manage	Limiting benefits for demand management

Pass-Through

Advantages	Disadvantages
Greater transparency	Risk of higher third party charges
Benefit from actual third party charges	Complex billing
No Risk Premium	Costs are not secured
Able to take advantage of triad avoidance	Commonly miss-sold
Suitable for dynamic response products	Budget forecasting difficulties