Under CPFF, reimbursable costs are subject to what limitation?

Under CPFF, reimbursable costs are subject to what limitation?

• A. Allowable Cost interpretation
• B. No limitations
• C. Fixed ceiling
• D. Personal costs

Answer: (A)

In CPFF contracts, reimbursable costs are limited to what counts as allowable costs. The key idea is that only costs that are reasonable, allocable to the contract, and in accordance with the contract terms and applicable cost principles can be billed to the government. Costs that are unallowable—such as personal expenses or items not properly allocable to the project—cannot be reimbursed, even if they were incurred. The fixed fee is separate from these reimbursable costs, which hinges entirely on whether the costs meet the allowable criteria.

In CPFF contracts, reimbursable costs are limited to what counts as allowable costs. The key idea is that only costs that are reasonable, allocable to the contract, and in accordance with the contract terms and applicable cost principles can be billed to the government. Costs that are unallowable—such as personal expenses or items not properly allocable to the project—cannot be reimbursed, even if they were incurred. The fixed fee is separate from these reimbursable costs, which hinges entirely on whether the costs meet the allowable criteria.