In this type of cost-reimbursable contract, the seller is reimbursed for allowable costs plus a predetermined fee, an incentive bonus, based on meeting certain time and cost objectives.

Question

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Cost-plus-incentive-fee (CPIF) contracts provide the seller with a predetermined fee or incentive bonus based on meeting certain time and cost goals, in addition to reimbursement of allowable costs. This incentivizes the seller to complete the project efficiently and effectively. Choice A (Cost-plus-percentage of cost) is not a common type of cost-reimbursable contract, and Choice D (Cost-plus-flexible-fee) is not a recognized contract type. Choice B (Cost-plus-fixed-fee) provides the seller with a fixed fee in addition to reimbursement of allowable costs, but does not include an incentive bonus based on performance.

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