This is part of the Cost Reimbursable Contract Type which is one of the tools and techniques of the Plan Purchases and Acquisitions.
As per Cost Reimbursable contract, all the allowable costs to produce the products or services (deliverables) of the project is charged to the buyer of the contract. As a nature of this contract buyer carrys the bigger risk as the total cost is uncertain.
The Cost Plus Fixed Fee (CPFF), the seller is reimbursed all the allowable cost plus a fixed fee upon successfull completion of the contract. Cost is uncertain and Fee is fixed in this contract.
Pros
1. Allows the buyer to keep the fee fixed
Cons
1. Seller will not motivated to control the cost of the project as their fee is fixed
-Posted by Dhana
Posted by Dhanasekaran 