Which of the following is not typical of a CPFF arrangement?
A) Buying firm pays a fixed fee and all costs beyond fee
B) Fee is for an unlimited scope of work
C) Supplier has no incentive to control costs
D) Characterized by low supplier profit
E) A total liability limit is usually established

Question

Quizplus · Accepted Answer

CIn a Cost Plus Fixed Fee (CPFF) arrangement, the fee is not for an unlimited scope of work (B); rather, the scope of work is defined in the contract. Additionally, it's incorrect to say the supplier has no incentive to control costs (C); while the supplier is reimbursed for all allowable costs up to a set limit, they often still have an incentive to control costs to maintain profitability and reputation.

Which of the Following Is Not Typical of a CPFF