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Project Management & Agile · Intermediate

Cost Plus Fixed Fee Contract (CPFF)

Cost-reimbursable contract in which the seller is reimbursed allowable costs plus a fixed fee calculated on initial estimated costs.

Definition

The fee does not change with actual cost unless scope changes, so the buyer bears cost risk.

Example

Costs $500k actual; fee fixed at $40k.

Exam tip

Fee is fixed in amount, not as a percentage of actual cost.

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