Question

All of the following are true of cost plus fixed fee (CPFF) contracts, except:

a The seller is reimbursed for all allowable costs incurred performing the

contract work.

b The seller receives a fixed fee calculated as a percentage of the initial

estimated project cost.

c The fee does not change based on the performance of the seller.

d The seller receives a fee calculated as a fixed percentage of the actual

project cost.

Answer 1

The best answer is D

 i CPFF contracts pay a fixed fee to the seller based on the initial

estimated value of the work.

 ii All allowable costs are reimbursed by the buyer.

 iii The only time the fee will change is if the buyer changes the scope of

the work.