A project requires a vendor to conduct research where the scope is not well defined and will evolve. The buyer wants to share the risk with the vendor but cap their own exposure. Which contract type is BEST?

Answer options:

Firm Fixed Price (FFP)

Cost Plus Fixed Fee (CPFF)

Time and Materials (T&M) with a Not-To-Exceed clause

Fixed Price Incentive Fee (FPIF)

How to approach this question

Match 'undefined scope' to T&M or Cost Plus. Match 'cap exposure' to NTE or Fixed.

Full Answer

C.Time and Materials (T&M) with a Not-To-Exceed clause✓ Correct

Task 11 involves planning procurement strategy. T&M is the standard for staff augmentation/research where scope is fluid. The cap protects the budget.

Common mistakes

Choosing Fixed Price for undefined scope (vendors will refuse or overcharge).

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