BPG uses a fixed pricing model and incorporates into the fixed price risk sharing corridors. We spend a great deal of time with our customers on the scope of work necessitated by their project. It allows BPG to better size the project with their customers. We then drill down on a floor and ceiling price point for the utilization of our services. This allows BPG to employ an economy of scale pricing formula. Meaning at the lower utilization of our services the fixed price is higher and as the utilization grows the fixed pricing begins to drop.
This is a win-win proposition for both the buyer and seller of tumor registry services. It focuses the buyer on more precise metrics for projected utilization of our services and BPG on managing and smoothing out under-supply and over-supply issues. Both parties bear the risk of irrational exuberance on both the demand and supply side of the project.