Cost-Reimbursement Contract
A contract reimbursing allowable costs plus a fee, requiring an adequate accounting system.
A cost-reimbursement (cost-plus) contract pays the contractor's allowable incurred costs plus a fee, used when uncertainties prevent estimating cost with enough accuracy for a fixed price — common in R&D and complex technical services. Variants include Cost-Plus-Fixed-Fee (CPFF) and Cost-Plus-Award-Fee (CPAF). These contracts require a DCAA-adequate accounting system capable of segregating and tracking costs, which is a significant compliance threshold for smaller SDVOSBs.
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