Which of the following types of contracts has the least risk to the seller?On a firm-fixed-price contract, the seller absorbs 100 percent of the risks; while on a cost-type contract, the buyer carries the most risk. Cost-plus-fixed-fee contracts have less risk to sellers than cost-plus-award-fee or cost-plus-incentive-fee contracts because the fee is fixed based on costs, so the seller is guaranteed a certain level of profit.
Question:
Which of the following types of contracts has the least risk to the seller?
Options:
Firm-fixed-price
Cost-plus-fixed-fee
Cost-plus-award-fee
Fixed-price-incentive fee
Correct Answer
The Correct Answer for this Question is
Cost-plus-fixed-fee
