Types of cost-reimbursable contracts are:  

1. Cost Plus Fixed Fee contract (CPPF): Compensation is based on a fixed sum independent of the final project cost. The customer agrees to reimburse the contractor's actual costs, regardless of amount, and a negotiated fixed fee in addition. 
2. Cost Plus Fixed Percentage contract (CPFP):  This is the same as CPFF with the difference that the fee is a negotiated percentage of the cost. 
3. Cost Plus Fixed Fee with Guaranteed Maximum Price contract: The fee is a negotiated fixed sum of money. The contractor quotes a maximum contract price. If price exceeds this maximum, the contractor has to bear the overrun. The contractor agrees to quote the guaranteed maximum only when he is confident of determining it from the plans and specifications available. 
4. Cost Plus Fixed Fee with Bonus contract:  In addition to fixed fee, a bonus is given if the project finishes below budget, ahead of schedule and so on. 

Cost-reimbursable contracts are used mainly for R and D projects and are rarely used in construction projects -  the main reason being that assigning responsibility to an entity for meeting the performance parameters and controlling the performance parameters makes it very complex to the entity to handle. Incorporating guaranteed maximum price and bonus clauses can facilitate better control to some degree.  

Posted Date: 9/27/2012 7:59:16 AM | Location : United States

Ask an Expert

Related Discussions:- Types of cost-reimbursable contracts, Assignment Help, Ask Question on Types of cost-reimbursable contracts, Get Answer, Expert's Help, Types of cost-reimbursable contracts Discussions

Write discussion on Types of cost-reimbursable contracts
Your posts are moderated

Write your message here..

Related Questions

Sampling theory, difference between large sample test and small sample test... difference between large sample test and small sample test

Normal distribution, Normal Distribution Meaning: According  to ya Lu... Normal Distribution Meaning: According  to ya Lun Chou  There perfectly smooth and symmetrical  curve, resulting  from the expansion of the binomial (p+q) n    when n approac

Lorenz curve , Lorenz Curve   It is a graphic method of measur... Lorenz Curve   It is a graphic method of measuring dispersion. This curve was devised by Dr. Max o Lorenz a famous statistician.  He used this technique for wealth it i

Determine maximum process variability, You are attempting to purchase ... You are attempting to purchase a part from a specialty vendor. Your company requires a C p of at least 1.67 on a critical dimension of the part. The dimensional specific

Bivariate distribution, f(x,y)=c(6-x-y) ,o find P(X+Y f(x,y)=c(6-x-y) ,o find P(X+Y

Determine the maximum process variability, You are going to purchase a part... You are going to purchase a part from a specialty vendor.  Your company needs a C p of at least 1.67 on a critical dimension of the part.  The dimensional specification for this p

Inverse cumulative distribution function, The Null Hypothesis - H0: β0 = ... The Null Hypothesis - H0: β0 = 0, H0: β 1 = 0, H0: β 2 = 0, Β i = 0 The Alternative Hypothesis - H1: β0 ≠ 0, H0: β 1 ≠ 0, H0: β 2 ≠ 0, Β i ≠ 0      i =0, 1, 2, 3

Simulation, Simulation When decisions are to be taken under conditions ... Simulation When decisions are to be taken under conditions of uncertainty, simulation can be used. Simulation as a quantitative method requires the setting up of a mathematical

Main effects and interactions, what is the independent variable in how ener... what is the independent variable in how energetic do people feel after drinking different types of soft drints?

Statistical inquiry, Main stages of Statistical Inquiry The following a... Main stages of Statistical Inquiry The following are the various stages of a statistical inquiry (1)   Planning the Inquiry: First of all we have to assess the problem und