Cost Plus Fixed Fee Notes: Definitions & Explanations PDF | Download eBooks
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Cost Plus Fixed Fee Definition:
In cost plus fixed fee (CPFF) contract, the seller is reimbursed for all allowable costs for performing the contract work and receives a fixed-fee payment.
A Guide to the Project Management Body of Knowledge by Project Management Institute
Cost Plus Fixed Fee Notes:
Contracts can be classified into two categories. The contract categories affect the procurement planning process. The two classes of contracts are fixed price contracts and cost-reimbursement contracts. One of the type of cost-reimbursement contract is cost plus fixed fee (CPFF) contract. Cost plus fixed fee contract involves paying the actual costs incurred to the seller along with a fixed fee/profit which the buyer and the seller agreed upon. The fixed fee/profit is calculated on the basis of the estimated costs. The amount of fixed fee or profit paid that is to be paid to the seller does not change unless the work scope changes.
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