What is an example of a cost reimbursement contract?

A cost reimbursable contract (sometimes called a cost plus contract) is one in which the contractor is reimbursed the actual costs they incur in carrying out the works, plus an additional fee. Option E of the NEC3 Engineering and Construction Contract (ECC) is an example of a cost reimbursable contract.

What are the types of cost reimbursement contracts?

Cost-reimbursement contracts come in several different forms, which you can see below.

• Cost Contracts.
• Cost-Sharing Contracts.
• Cost-Plus-Fixed-Fee (CPFF) Contracts.
• Cost-Plus-Incentive-Fee (CPIF) Contracts.
• Cost-Plus-Award-Fee (CPAF) Contracts.
• Cost Plus Percentage of Cost (CPPC) Contracts.

What is considered cost reimbursement contract?

Definition: A cost-reimbursement contract is a contract where all allowable contractor expenses are covered to an agreed-upon limit and an additional payment for a profit.

What are the four types of cost reimbursable contracts?

You can divide Cost Reimbursable contracts into four categories:

• Cost Plus Fixed Fee (CPFF)
• Cost Plus Incentive Fee (CPIF)
• Cost Plus Award Fee (CPAF)
• Cost Plus Percentage of Cost (CPPC)

When would you use a cost reimbursement contract?

Cost reimbursement contracts, also called cost-plus contracts, are often used for research projects, construction, and other undertakings that will require the purchase of materials.

What is a cost reimbursement grant?

A reimbursement grant provides funding to grant recipients after expenses have been incurred. The grantee must follow a certain procedure to obtain the reimbursement for project expenses. Reimbursements are provided on a set payment schedule after the organization has submitted sufficient documents to verify expenses.

How do you calculate cost of reimbursement?

The contractor is reimbursed all its justifiable costs in addition to a calculated fee….For example, assume a CPIF with:

1. Target Cost = 1,000.
2. Target Fee = 100.
3. Benefit/Cost Sharing Ratio for cost overruns = 80% Client / 20% Contractor.
4. Benefit/Cost Sharing Ratio for cost underruns = 60% Client / 40% Contractor.

What is a reimbursement agreement?

Reimbursement Agreement means an unconditional agreement or other undertaking in favor of the Corporation from an Indemnitee to promptly repay the Expense Advances if, when and to the extent determined in a Final Decision that such Indemnitee is not entitled to be indemnified for such Expenses under this Article or …

Is grant a revenue?

Grant revenue represents income usually received from other levels of government. Base Grant revenue refers to the LCFF revenue earned by a school’s general educationstudent population regardless of whether students are identified as high-needs or not.

What is total potential cost of a contract?

Definition of TOTAL POTENTIAL COST OF A CONTRACT: Sum of (1) estimated costs of fees, reimbursable expenses, remuneration with a contract, (2) cost of contracts issued to one contractor for similar jobs

What is an example of a cost plus contract?

Cost-plus-award fee (CPAF) contracts pay a fee based upon the contractor’s work performance. In some contracts, the fee is determined subjectively by an awards fee board whereas in others the fee is based upon objective performance metrics. An aircraft development contract , for example, may pay award fees if the contractor achieves certain speed, range, or payload capacity goals. Cost plus percentage of cost pay a fee that rises as the contractor’s cost rise. Because this contract type

What is total cost of a contract?

The total cost of a contract is the sum of the direct and indirect costs allocable to the contract. While the total cost of a contract includes all costs properly allocable to the contract, the allowable costs to the Government are limited to those allocable costs which are allowable pursuant to Part 31 and applicable agency supplements.

Is a fixed price contract subject to audit?

Competitively awarded firm -fixed-price contracts are not subject to a government audit. If the contract is sole-source it is subject to post-award audit to make sure that you are complying with the Truthful Cost or Pricing Act (P.L. 87-653) known as TINA.