Cost Plus Fixed Fee

A brief explanation of the Cost Plus Fixed Fee (CPFF) contract type utilized fairly regularly in government contracting.

Category:

Entertainment

Tags:

• CPFF
• cost
• plus
• fixed
• fee
• reimbursement
• procurement
• contracts
• government
• contract

[fluffymcdeath]

So the trick is to have kick back relationships with suppliers.

[jimenezev]

Thanks for the explanation, but in working with government contracts, I don't necessarily agree that the incentive is to reduce costs in the area below fee, because in my experience, any estimated funds that are not used must be returned to the US government. So it makes sense to try and utilize the maximum allocation of money that is provided at the beginning of a contract. Otherwilse, the term "use it or lose it" comes into effect.

[AlphaDog147]

nice video i understand now !!

[fitzyjoe]

Nice video. Thanks.

[ReX342]

I love how you said "theoretically" when talking about the incentive to lower cost. Though just like a system without cost plus (just costs), there's no incentive to lower "actual costs". "Actual costs" will be artificially increased. That is, the reported costs will be. Just like a system without (eg 5%) fixed fee. On the other hand. The incentive to lower costs (if real), could explain why quality is still not delivered. Because as soon as you get the contract, you cut costs.

[manjiyilkurian]

Perfect explanation ..Thanks a lot for sharing your knowledge with us through Youtube...These videos and explanations are best and helps me a lot in my PMP -Procurement studies.

[TheBucksB]

perfect video, thanks a lot

[hodgiemodough]

Your information was very helpful. Thanks

[adoree01]

Jen, thanks for putting together these videos. It has helped me gain a better understanding of CPFF contracts. You are among my favorite DAU professors. Good luck in Italy!