Contract Types: FFP, T&M, CPFF Flashcards
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Read the first 7 Contract Types: FFP, T&M, CPFF flashcards as text
Which contract type requires the contractor to maintain an approved accounting system as a prerequisite for award?
Answer: Cost-Plus-Fixed-Fee (CPFF)
Cost-reimbursement contracts like CPFF require the contractor to have an accounting system adequate to track and segregate costs, as verified by DCAA before award.
In scenario-based contracting, which contract type would a contracting officer LEAST likely select for a routine janitorial services requirement?
Answer: Cost-Plus-Fixed-Fee
CPFF is inappropriate for well-defined, predictable services like janitorial work where FFP pricing is easily achievable and cost risk is low.
Under a T&M contract, the government's greatest risk is:
Answer: Contractor having no incentive to control labor hours
Because the contractor is paid for every hour worked at fixed rates, there is no financial incentive to complete the work efficiently or to minimize hours billed.
If the government changes the scope of an FFP contract, the change in price is governed by which contract clause?
Answer: FAR 52.243-1, Changes—Fixed-Price
FAR 52.243-1, the Changes—Fixed-Price clause, gives the government the right to order changes and requires equitable price adjustments when the scope is modified.
A CPFF contract's estimated cost can be increased by the contracting officer if the contractor demonstrates that it will overrun. What happens to the fixed fee in this case?
Answer: The fee remains unchanged unless specifically renegotiated
Increasing the estimated cost ceiling does not automatically change the fixed fee; the fee can only be adjusted through a formal contract modification with bilateral agreement.
Which of the following is a distinguishing feature of an FFP Level-of-Effort (LOE) term contract versus a standard FFP contract?
Answer: Payment in an FFP LOE is based on hours delivered, not a defined end product
An FFP LOE contract pays a fixed price for a specified number of labor hours or level of effort rather than for a defined deliverable or end product.
When comparing CPFF to T&M contracts, which statement is MOST accurate?
Answer: CPFF separates fee from cost while T&M embeds profit in fixed hourly rates
Under CPFF, the fee is a separately negotiated fixed amount on top of reimbursed costs, whereas T&M labor rates are all-inclusive fixed rates that already incorporate profit.