Program Management Professional (PgMP) — Question 148

You are the program manager of the NQA Program. In this program you're planning which contract types you'll allow into the program and which ones you will not.
One contract type you won't accept is the cost plus percentage of cost contract. Which of the following is a valid reason you would not allow this contract type into your program?

Answer options

• A. The contract type requires the vendor to provide a fee for the time invested and the materials used.
• B. The contract type allows the vendor to change the price of the work he's completed.
• C. The contract type allows is the most dangerous for the buyer.
• D. The contract type requires the vendor to provide a fixed price for the work.

Correct answer: C

Explanation

The correct answer is C because cost plus percentage of cost contracts can lead to excessive costs for the buyer, as the vendor has little incentive to control expenses. Options A and B do not capture the inherent risk associated with this contract type, while option D describes a different contract structure entirely.