M5 Flashcards
The process that creates a cost baseline
Determine Budget
A plan that identifies the resources (including costs), goals, and schedule that allows a firm to achieve those goals
budget
top management establishes an overall budget at the start (type of budgeting)
top-down budgeting
begins with applying direct and indirect costs to work packages (including activities)
bottom-up budgeting
activities that create cost
cost drivers
the price is agreed upon at the time of contract and typically only changes with scope changes
Firm Fixed Price
FFP
multiple incentive fees provide contract flexibility
fees could depend on performance related to cost, the schedule, quality or other factors
Fixed Price Incentive Fee
FPIF
the contract price is adjusted because of changes in costs due to inflation, currency exchange, or other conditions
Fixed Price with Economic Price Adjustment
FPEPA
reimbursed for legitimate costs plus a fee based as a percentage of the initial estimated costs
Cost Plus Fixed Fee
CPFF
Reimbursed for legitimate costs costs plus an incentive fee based on performance
Cost Plus Incentive Fee
CPIF
Reimbursed for legitimate costs plus the majority of the fee is based on the buyer’s subjective assessment of performance meeting the award criteria
Cost Plus Award Fee
CPAF
frequently used to acquire experts or temporary staff where exact SOW’s cannot be created easily
Time & Material
T&M
