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 |
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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 |
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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 |