In this type of cost-reimbursable contract, the seller is reimbursed for allowable (agreed to by buyer) costs plus a fee, calculated as a percentage (again agreed to by the buyer) of the actual costs.

Question

Quizplus · Accepted Answer

Cost-plus-percentage of cost (CPPC) contracts involve the seller being reimbursed for all allowable costs to an agreed-upon limit, plus an additional fee calculated as a percentage of the actual costs. This type of contract provides a direct incentive for the contractor to increase the project costs in order to increase their fee, which is why it is described as the seller being reimbursed for costs plus a fee that is a percentage of the costs.

In This Type of Cost-Reimbursable Contract, the Seller Is Reimbursed