In a ____, the customer agrees to pay the contractor for all actual costs (labor, materials, and so forth), regardless of amount, plus some agreed-upon profit.
A) fixed price contract
B) flat price contract
C) BAFO contract
D) cost reimbursement contract

Question

Quizplus · Accepted Answer

A cost reimbursement contract is the only option where the customer agrees to pay the contractor for all actual costs (labor, materials, and so forth), regardless of amount, plus some agreed-upon profit. Option A (fixed price contract) and B (flat price contract) have a set price that the customer agrees to pay, while option C (BAFO contract) is a "best and final offer" contract where the customer chooses one proposal with a fixed price rather than agreeing to pay for actual costs.

In a ____, the Customer Agrees to Pay the Contractor