Certified Professional in Learning and Performance (CPLP) Practice Exam 2026 - Free CPLP Practice Questions and Study Guide

The type of contract that involves analysis and development with a negotiated profit percentage is the cost plus fixed price contract. In this arrangement, the contractor is reimbursed for their allowable costs incurred while performing the contract work and, in addition to that, they receive a fixed fee as profit. This fixed fee is agreed upon upfront and does not change based on the underlying costs.

The primary advantage of a cost plus fixed price contract is that it allows for flexibility in managing the costs of projects that may have uncertain or evolving requirements. As a result, the contractor does not bear as much risk for cost overruns since they will always be compensated for their direct costs plus an additional fee.

In contrast, a firm fixed price contract sets a set price that the contractor must adhere to, regardless of the actual costs incurred. Cost plus incentive fee contracts involve a profit structure that can increase or decrease based on performance metrics, which may not align directly with a fixed profit percentage. Lastly, performance-based contracts focus on the outcomes or performance of the contractor rather than the cost structure, which is a different approach entirely.