What are the types of negotiated contracts?

What are the types of negotiated contracts?

• A. Time & Materials
• B. Fixed Price & Cost Reimbursement
• C. Firm Fixed Price
• D. Incentive & Labor Hour

Answer: (B)

Negotiated contracts are grouped into two broad families: fixed-price contracts and cost-reimbursement contracts. A fixed-price contract sets a firm price for the work, shifting most cost risk to the seller, while a cost-reimbursement contract allows the buyer to reimburse actual allowable costs plus an agreed fee, shifting more risk to the buyer. Time & Materials and Labor Hour are specific contract forms that can be used within these families, but they aren’t the primary categories themselves. Firm Fixed Price and Incentive are subtypes under the fixed-price family, whereas Time & Materials and Labor Hour aren’t stand-alone main categories. So the best answer identifies the two main contract-type families: Fixed Price and Cost Reimbursement.

Negotiated contracts are grouped into two broad families: fixed-price contracts and cost-reimbursement contracts. A fixed-price contract sets a firm price for the work, shifting most cost risk to the seller, while a cost-reimbursement contract allows the buyer to reimburse actual allowable costs plus an agreed fee, shifting more risk to the buyer. Time & Materials and Labor Hour are specific contract forms that can be used within these families, but they aren’t the primary categories themselves. Firm Fixed Price and Incentive are subtypes under the fixed-price family, whereas Time & Materials and Labor Hour aren’t stand-alone main categories. So the best answer identifies the two main contract-type families: Fixed Price and Cost Reimbursement.