Which one of the following best describes DoD philosophy of budgeting for a Cost

Question

Which one of the following best describes DoD philosophy of budgeting for a Cost Plus Fixed Fee contract?    A) Budget for the target cost plus the incentive fee    B) Budget for the estimated cost plus the base fee plus the entire earnable award fee    C) Budget for the estimated cost plus the award fee only    D) Budget for the estimated cost plus the fixed fee to be paid regardless of contractor performance Which one of the following best describes DoD philosophy of budgeting for a Cost Plus Fixed Fee contract?    A) Budget for the target cost plus the incentive fee    B) Budget for the estimated cost plus the base fee plus the entire earnable award fee    C) Budget for the estimated cost plus the award fee only    D) Budget for the estimated cost plus the fixed fee to be paid regardless of contractor performance

Explanation / Answer

A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for a fee consisting of an award amount that the contractor may earn for performance and that is sufficient to provide motivation for excellence in such areas as cost, schedule and technical performance

Answer: option B

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