With a Cost Plus Fixed Fee (CPFF)
A) the customer assumes the risk of cost overruns
B) the price to the customer remains the same
C) the contractor is assured of being reimbursed for all allowable expenses
D) contractor risks underestimating the cost and losing money on the project
E) cutting-corners to reduce costs is a potential risk

Question

Quizplus · Accepted Answer

In a Cost Plus Fixed Fee (CPFF) contract, the customer assumes the risk of cost overruns because they agree to cover the actual costs plus a fixed fee for the contractor. The contractor is assured of being reimbursed for all allowable expenses, making it a lower financial risk for them.