Hello PMPers,
I'm looking for some explanations for the answer to Q23 on Oliver Lehmann's 75 questions(FREE and can be found
here
and am wondering if someone can help shed some light to improve my understanding - Why is the correct to below question answer D and not C? Shouldn't all costs be reimbursed to contractor in a CPFF, if the customer has agreed? Shouldn't costs for the customer to contractor go up?
A prime contractor in a customer project under CPFF contract has run into unexpected technical problems. Fixing them will require a lot of additional work to be done. The company made a decision to book more staff and equipment from their subcontractors in order to adhere to the agreed timeline. The customer agreed to this decision. What will most likely happen?
A The contractor‘s indirect costs will increase and the customer‘s payment for them will increase, too.
B The contractor‘s indirect costs will increase, but the customer‘s payment for them will not increase.
C The contractor‘s indirect costs will not increase, but the customer‘s payment for them will.
D Both the contractor's indirect costs and the customer‘s payment for them will not increase. [/i]
Thanks,
Vik