In a cost reimbursable contract, _____.
A) the contract usually details the quality of the goods or services, the timing needed to support the project, and the cost of delivering goods or service
B) the organization agrees to pay the contractor for the cost of performing the service or providing the goods plus a profit
C) the contract provides an incentive for performing on the project above the established baseline in the contract
D) the contractor assumes the risks for unexpected increases in labor and materials that are needed to provide the service or materials and in the quantity of time and materials needed
E) developing a clear scope of work, creating a list of highly qualified bidders, and developing a clear contract is critical

Question

Quizplus · Accepted Answer

A cost reimbursable contract is a type of contract in which the organization agrees to pay the contractor for the cost of performing the service or providing the goods plus a profit. The contract may detail the quality of goods or services, the timing needed to support the project, and the cost of delivering goods or services, but the key feature is that the contractor is reimbursed for actual costs incurred. In a cost reimbursable contract, the contractor generally assumes the risks for unexpected increases in labor and materials needed to provide the service or materials, as well as the quantity of time and materials needed. Developing a clear scope of work, creating a list of highly qualified bidders, and developing a clear contract are also important, but they are not specific to cost reimbursable contracts. Finally, a cost reimbursable contract does not provide incentives for performing above the established baseline, as this would require a different type of contract.

In a Cost Reimbursable Contract, _____