What are the types of Cost Reimbursable contracts? Describe the benefits of using these types of contracts and explain how these types of contracts could be useful and how they could not be useful in an information technology project. In cost reimbursable type of contracts, the final cost will be determined when the contract is complete or on set previous date. Even before the work begins a complete cost estimate is set which will allow the project to set a budget and establish a cadency for reimbursement. There are different types of Cost Reimbursable contracts such as the Cost contracts, Cost-sharing contracts, Costplusfixedfee contracts, Costplusincentivefee contracts, Costplusawardfee contracts. Looking into each of these type in a cost contracts only the actual costs of completing the contract are covered and no additional fee are covered. Cost contracts are typically used for research and nonprofit work. In Cost-sharing contracts the contractor will agree to the pre assumed part of the contract expenses. The reimbursement will be for the for the agreed-upon portion of the expenses. In this type of contracts the contractors receives no additional fee. In Cost-plus-fixed-fee contracts contractors receives reimbursement plus a predetermined fee that is negotiated when the contract is finalized and will not change based on the actual contract cost. This fee however can be revised if the work that is required to complete the contract changes. This type of contract is useful in situations where the risk to the contractor might otherwise outweigh any non-financial benefits. There are two of these types completion and term. In a Cost-plus-incentivefee contracts the contractor receives reimbursement plus an adjustable fee. The first initial contract will establish the target for cost and fee, as well as a minimum and maximum fee and a formula for fee adjustment, when the contract will be completed this formula will be used to pay the contractor. In Costplusawardfee contracts the contractors will receive reimbursement and a fixed fee, with the potential to earn all or part of an additional fee. The additional fee is based on the performance of the contractor. Hi Astha, Thank you for sharing your post on the different types of costreimbursement contracts. I like the way you have kept the post short and concise. All the points you bring about the different types of contract are correct and to add to your post I wanted to point about two other types of contracts that I noticed was missing from the post. First, being the cost contract - which is only the actual costs of completing the contract are covered; the contractor receives no additional fee. Cost contracts are typically used for research and nonprofit work. Second, being the cost- sharing contract where the contractor agrees to assume part of the contract expenses. The agency will reimburse the contractor for an agreed-upon portion of those expenses. As with a cost contract, the contractor receives no additional fee. A contractor should enter into a cost- sharing contract only if the work will benefit the company in ways sufficient to offset the shared expenditures