Which of the following contract types is described in the statement below? "The seller is reimbursed for all allowable costs for performing the contract work, and receives a fixed payment calculated a

The correct answer is A. Cost Plus Fixed Fee Contracts (CPFF). A Cost Plus Fixed Fee (CPFF) contract reimburses the seller for all allowable costs incurred, plus a fixed fee that is typically calculated as a percentage of the original estimated cost. The key distinguishing feature is that the fee is FIXED - it does not change based on actual

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Question

Which of the following contract types is described in the statement below? "The seller is reimbursed for all allowable costs for performing the contract work, and receives a fixed payment calculated as a percentage for the initial estimated project costs."

Options

ACost Plus Fixed Fee Contracts (CPFF)
BFixed Price Incentive Fee Contracts (FPIF)
CFirm Fixed Price Contracts (FFP)
DCost Plus Incentive Fee Contracts (CPIF)

How the community answered

(52 responses)

A
92% (48)
B
4% (2)
C
2% (1)
D
2% (1)

Explanation

A Cost Plus Fixed Fee (CPFF) contract reimburses the seller for all allowable costs incurred, plus a fixed fee that is typically calculated as a percentage of the original estimated cost. The key distinguishing feature is that the fee is FIXED - it does not change based on actual performance or cost, unlike CPIF (D), where the fee varies based on performance incentives. FPIF (B) is a fixed-price contract with incentives, not a cost-reimbursable type. FFP (C) pays a set price regardless of actual costs - the seller absorbs all cost risk.

Topics

#Contract Types#Procurement Management#Cost-Reimbursable Contracts#CPFF

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