Cost-Reimbursement Contract
The government reimburses allowable costs plus a fee.
Definition
Cost-reimbursement contracts pay allowable, allocable, and reasonable costs plus a fixed, incentive, or award fee, and require an adequate accounting system.
Why it matters
These contracts require a DCAA-compliant accounting system — a gate many small firms fail.
Example
A research contract uses cost-plus-fixed-fee with a 7% fee.
Related terms
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