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There are four general types of cost reimbursement contracts, all of which pay every allowable, allocatable, and reasonable cost incurred by the contractor plus a fee or profit which differs by contract type. Cost Plus Fixed Fee (CPFF) contracts pay a pre-determined fee that was agreed upon at the time of contract formation. In a Cost-Plus-Incentive Fee (CPIF) contract, a larger fee is awarded for contracts which meet or exceed performance targets including cost savings. 2 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 ...
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