What is Cost Plus Fixed Fee Contract (CPFF)?

A Cost Plus Fixed Fee (CPFF) contract is similar to employing someone to provide a job and agreeing to pay for their expenditures plus a specific fee for their work. Assume you employ a decorator under a CPFF contract to refurbish your home. You agree to cover all of their expenditures, such as paint, furniture, and tools, and you pay them a flat price for their work. As a result, whether they buy fewer supplies or spend less time than predicted, their charge remains the same, ensuring that they are compensated for their efforts.