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  • Question

    What is the correct definition of: Cost plus percentage of cost? and where in the FAR can i find more inofrmation about this type of contracts?


    Answer

    FAR 16.102(c) prohibits the use of the CPPC contract type in both prime contracts and subcontracts. However, you'll notice that the FAR does not explicitly define it, which leads to the question: What is the difference between a CPPC and T&M contract? Two differences are that (i) the bundled fixed hourly rates under T&M contracts are more restrictive than are "all reasonable, allocable, and allowable costs" under a cost reimbursement contract; and (ii) profit under a T&M does not vary with material usage, which is not the case under a CPPC arrangement.

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