In this type of cost-reimbursable contract, the seller is reimbursed for allowable costs plus a fixed fee, calculated as a percentage of the allowable costs.
A) Cost-plus-percentage of cost (CPPC)
B) Cost-plus-fixed-fee (CPFF)
C) Cost-plus-incentive-fee (CPIF)
D) Cost-plus-flexible-fee (CPFF)

Question

Quizplus · Accepted Answer

Cost-plus-fixed-fee (CPFF) contracts provide the seller with reimbursement for allowable costs incurred during the project, plus a fixed fee. The fee is typically calculated as a percentage of the allowable costs and is negotiated at the beginning of the contract. This type of contract is often used when the scope of work is well-defined and the buyer wants to incentivize the seller to control costs. The other options listed (CPPC, CPIF, and CPFF) all involve different types of fees or incentives in addition to reimbursing the seller for allowable costs.

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