Understanding Cost-Plus-Fixed-Fee Contracts
USFCR
APRIL 14, 2025
A Cost-Plus-Fixed-Fee (CPFF) contract reimburses a contractor for allowable costs incurred during a project and provides a fixed fee for profit. Unlike Firm-Fixed-Price contracts, where contractors assume the risk of cost overruns, CPFF contracts protect businesses from financial loss while still ensuring a reasonable return.
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