CISSP-ISSMP · Question #38
Which of the following contract types is described in the statement below? "This contract type provides no incentive for the contractor to control costs and hence is rarely utilized."
The correct answer is B. Cost Plus Percentage of Cost. Cost Plus Percentage of Cost contracts pay a fee that rises as the contractors cost rise. Because this contract type provides no incentive for the contractor to control costs, it is rarely utilized. The U.S. Federal Acquisition Regulations specifically prohibit the use of this…
Question
Which of the following contract types is described in the statement below? "This contract type provides no incentive for the contractor to control costs and hence is rarely utilized."
Options
- ACost Plus Fixed Fee
- BCost Plus Percentage of Cost
- CCost Plus Incentive Fee
- DCost Plus Award Fee
How the community answered
(61 responses)- A3% (2)
- B95% (58)
- C2% (1)
Explanation
Cost Plus Percentage of Cost contracts pay a fee that rises as the contractors cost rise. Because this contract type provides no incentive for the contractor to control costs, it is rarely utilized. The U.S. Federal Acquisition Regulations specifically prohibit the use of this type for U.S. Federal Government contracting.
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