Project Management Professional (PMP) Exam Practice – Question1633

You have decided to award a contract to a seller that has provided quality services to your company frequently in the past. Your current project, although somewhat different from previous projects, is similar to other work the seller has performed. In this situation,
to minimize your risk you should award what type of contract?


A.
Fixed price with economic price adjustment
B. Fixed-price-incentive (firm target)
C. Firm-fixed-price
D. Cost-plus-award-fee

Correct Answer: C

Explanation:

Explanation:
In a firm-fixed-price contract, the seller receives a fixed sum of money for the work performed regardless of costs. This arrangement places the greatest financial risk on the seller and encourages it to control costs.