Contract Type - CPIF or CPAF?

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Joined: Tue Jun 26, 2018 11:15 am

Contract Type - CPIF or CPAF?

Postby leon Thu Jun 28, 2018 9:21 pm

Hello Everyone!

Opened new topic here as per suggestion. Please check below question from PMtraining. I thought the answer is B but the provided answer is A. But I'm still can't figure out what's the main reason to choose answer A in this question.

Could you help to clear my understanding? Thank you.

19. A seller entered into a contract with a buyer. At the end of the project, the seller was reimbursed for the cost of the project but received a low fee based on certain subjective criteria that were specified in the contract. What type of contract is this likely to be?

A. Cost Plus Award Fee
B. Cost Plus Incentive Fee
C. Cost Plus Fixed Fee (CPFF) contract
D. Fixed Price Incentive Fee (FPIF) contract

Answer is A.
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Joined: Sat Jan 04, 2014 3:55 pm

Re: Contract Type - CPIF or CPAF?

Postby manishpn Mon Jul 02, 2018 2:36 pm

Incentive is based on an objective criteria like if you deliver 5% under budget you will get 1% bonus, etc
Award is subjective and is usually at discretion of Buyer, you will get 1% bonus if you deliver with professionalism, now how do you define professionalism? it is subjetive
Manish P
PMP, PMI - ACP, SAFe Agilist ... ification/

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