PK0-005 Project Life Cycle Practice Question
During project execution, a vendor is hired to provide specialized services. The contract is structured so that the vendor is paid for all allowable costs plus a fixed fee. Which type of contract is this?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Cost-reimbursable contract
Cost-reimbursable contracts pay the seller for all legitimate costs plus a fee. A cost-plus-fixed-fee (CPFF) is a specific type where the fee is fixed, providing cost reimbursement plus a predetermined fee.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Time and Materials (T&M) contract
Why it's wrong here
T&M contracts pay for time and materials at agreed rates.
- ✗
Lump-sum contract
Why it's wrong here
Lump-sum is a type of fixed-price contract.
- ✗
Fixed-price contract
Why it's wrong here
Fixed-price contracts have a set price regardless of costs.
- ✓
Cost-reimbursable contract
Why this is correct
Cost-reimbursable contracts pay allowable costs plus a fee.
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Written by Johnson Ajibi, MSc IT Security
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This PK0-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PK0-005 exam.