CHAPTER 8

Cost-Plus-Fixed-Fee Contract

The cost-plus-fixed-fee (CPFF) contract is the most widely used of the cost-reimbursement contracts. Like other cost-reimbursement contracts, it enables the government and the contractor to engage in a contract containing an undefinitized performance work statement (PWS). Unlike other cost-reimbursement contracts, however, it allows for payment of fee up to the ceiling cap, at which point any cost overrun is paid to the contractor at cost, minus fee (provided that the added expenditure is formally authorized by the CO in writing).

A CO will likely manage many CPFF contracts. Because this contract type is so common, the CO must have a thorough understanding of its definition, purpose, use, performance ...

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