Contract Type
Cost Plus Fixed Fee
Definition
Cost Plus Fixed Fee (CPFF, FAR 16.306) reimburses the contractor for all allowable costs plus a fixed fee (profit) negotiated at award. The fee does not vary with actual costs — overruns do not increase the fee, and underruns do not decrease it. Maximum fee: 10% of estimated cost for R&D, 7% for other contracts. Requires an adequate accounting system.
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