What is the maximum fee for experimental, developmental, or research work under a cost-plus-fixed-fee contract?

• A. 20 percent
• B. 6 percent
• C. No limit
• D. 15 percent of the contract's estimated cost, excluding fee

Answer: (D)

In a cost-plus-fixed-fee contract, the contractor is reimbursed actual costs plus a fixed fee that is set in advance. When the work is experimental, developmental, or for research, that fixed fee is capped to prevent excessive profit on government funds. The cap is 15 percent of the contract’s estimated cost excluding the fee itself. This means the fee is a fixed percentage of what the project is expected to cost before adding the fee, and it does not change with actual expenditures. The other percentages (20 percent or 6 percent) or having no limit would either exceed the standard cap or ignore the policy entirely, so they’re not correct.