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Operating experience and efficienciesA CRO with substantial prior experience in a similar type project should be able to prepare a proposal and budget quotation reflecting the ability to recruit study investigators, conduct clinical monitoring, manage, analyze and interpret study data, and demonstrate efficiencies in the process. |
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Pricing decisionsThe majority of mature CROs will prepare an initial budget estimate for the project from the best information available to them. In many instances, they may choose to submit this projection as the budget quotation, but a CRO might either decrease or increase this initial estimate prior to submitting it to the client. A decrease is most likely if the CRO expects that the competition for the work is intense or, in the worst case, if the CRO is desperate to win the project. (Desperation may indicate financial instability which will only deteriorate if the project is awarded at an insufficient budget.) On the other hand, a decision to increase a quotation, generally, recognizes that the project will encounter some specific challenges not previously realized or that the CRO cannot handle the project but can do so only by recruiting costly additional resources. Should a sponsor wish to award the project to a CRO which has provided either an apparently low or high quotation, the potential risks should be fully understood. |
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VI.
Preliminary Budget Proposals |
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At times, sponsors request ballpark or preliminary budget quotations. Prior to responding, CROs must be certain they understand exactly what the sponsor is anticipating because the terms ballpark and preliminary may have either identical or vastly different definitions. |
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Ballpark estimates are generally considered to be very rough projections of cost for a project without final plans. Because ballpark quotations are typically subject to revision, it should be understood to be that they are preliminary. Indeed, budget details for such projections are often limited to very broad categories of activity or service and are presented as a cost range (minimum to maximum). |
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Sponsors often request these ballpark estimates to assist them in preparing an initial budget for a project or an entire product development program. However, such an exercise is credible only if quantitative and qualitative parameters of work scope are defined in the proposal. Even when primary parameters are reasonably well described, it may be problematic to compare quotations among responding CROs because interpre- |
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