TOPIC: Procument Question

The below is a question from RITAs Fastrack

Which of the following statements represents a fixed price incentive fee (FPIF) contract?

A. Pay $1,000,000.
B. Pay $1,000,000 plus $10,000 for every designated incremental quality level reached.
C. Pay all the costs plus a $10,000 fee.
D. Pay the costs plus $10,000 for every month the project is finished earlier than June 14.

Correct Answer:
B. Pay $1,000,000 plus $10,000 for every designated incremental quality level reached.

Is the correct answer D rather than B?

No, on a fixed price contract you never pay cost. However you are paying the performance fee if they reach their goals. In this case $10,000 a increment.

Best Wishes