Do you need customer support or technical assistance? Click here to submit a support ticket...
 Page:1

# TOPIC: Fixed Price Incentive Fee vs Cost Plus Incentive Fee Calculations

## Fixed Price Incentive Fee vs Cost Plus Incentive Fee Calculations 6 years 5 months ago #10403

 Kitty Kemal Topic Author Visitor What is the difference in calculating the costs, fees and prices for FPIF contracts and CPIF contracts? This question came up while I was going through the exercises in Rita. I tried to look for answers on the internet but I cannot find one that provides a reasonable comparison. From what I have read, the only difference I found is that FPIF has a Ceiling Price, but both contracts use the formulas: Final Fee = ((Target cost – Actual Cost) * Seller’s sharing ratio) + Target fee Final Price = Actual cost + Final Incentive Fee Can someone help me understand this topic and why is actual cost used in the final price for FPIF as I think it contradicts the meaning of a FP contact. Thanks in advance. Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Fixed Price Incentive Fee vs Cost Plus Incentive Fee Calculations 5 years 10 months ago #12538

 Nancy Topic Author Visitor I have the exact same question! Did you ever figure it out? Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Fixed Price Incentive Fee vs Cost Plus Incentive Fee Calculations 5 years 8 months ago #13067

 Anonymous Topic Author Visitor In FPIF, there's a ceiling price, the buyer will never pay above this price. The seller's profit decreases as the costs rises above the target cost. Once it hits the PTA, the buyer will no longer share the cost overrun, any cost overrun from that point onward will be totally absorbed by the seller. If the cost overrun goes beyond the ceiling price, the seller will suffer a loss. In CPIF, there's no ceiling price but there's a range for the incentive (min and max). The seller's profit will decrease as the cost increases above the target cost till it hits the min profit, by which point the buyer assume all costs and pays only min fee; likewise for underrun but in the opposite direction. Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Fixed Price Incentive Fee vs Cost Plus Incentive Fee Calculations 2 years 9 months ago #25327

 [email protected] Topic Author Visitor Thanks! Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.
 Page:1
Moderators: Yolanda MabutasMary Kathrine PaduaJohn Paul BugarinHarry ElstonKyle Kilbride, PMPJean KwandaDaniel Soerensen

OSP INTERNATIONAL LLC
OSP INTERNATIONAL LLC
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®