What is another name for Cost-Reimbursement (CR) contracts?

What is another name for Cost-Reimbursement (CR) contracts?

• A. Cost type
• B. Cost-Based Service
• C. Fixed-Price
• D. Time-based

Answer: (A)

Cost-Reimbursement contracts are paid based on the actual costs incurred by the contractor, plus an agreed-upon fee, with measurements and allowable cost rules in place. This type of arrangement is commonly called a cost-type contract. The name highlights how the price is determined—the buyer reimburses costs rather than paying a fixed price up front. So, the best answer is that it’s another name for cost-type contracts because both terms describe the same idea: reimbursement for costs incurred, rather than a predetermined fixed price. The other terms refer to different approaches—fixed-price sets a single price upfront, and time-based (or time-and-materials) describes billing by time and materials, not the standard synonym for CR contracts.

Cost-Reimbursement contracts are paid based on the actual costs incurred by the contractor, plus an agreed-upon fee, with measurements and allowable cost rules in place. This type of arrangement is commonly called a cost-type contract. The name highlights how the price is determined—the buyer reimburses costs rather than paying a fixed price up front.

So, the best answer is that it’s another name for cost-type contracts because both terms describe the same idea: reimbursement for costs incurred, rather than a predetermined fixed price. The other terms refer to different approaches—fixed-price sets a single price upfront, and time-based (or time-and-materials) describes billing by time and materials, not the standard synonym for CR contracts.