What is the correct percent cap for architect-engineer services for public works or utilities under a cost-plus-fixed-fee contract?

What is the correct percent cap for architect-engineer services for public works or utilities under a cost-plus-fixed-fee contract?

• A. 15 percent
• B. 10 percent
• C. 6 percent
• D. 5 percent

Answer: (C)

In cost-plus-fixed-fee contracts for architect-engineer services on public works or utilities, the government places a ceiling on the fixed fee portion to keep costs in check. That cap is six percent of the estimated cost of the contract. So the maximum fixed fee an A-E firm can receive under this setup is 6% of the estimated costs, regardless of how the actual costs end up. For example, with an estimated contract cost of 2,000,000, the top fixed fee would be 120,000. The 6% cap protects the government from excessive profits on professional services while still allowing a reasonable incentive for quality work. The other percentages are not the mandated cap for this specific scenario.

In cost-plus-fixed-fee contracts for architect-engineer services on public works or utilities, the government places a ceiling on the fixed fee portion to keep costs in check. That cap is six percent of the estimated cost of the contract. So the maximum fixed fee an A-E firm can receive under this setup is 6% of the estimated costs, regardless of how the actual costs end up. For example, with an estimated contract cost of 2,000,000, the top fixed fee would be 120,000. The 6% cap protects the government from excessive profits on professional services while still allowing a reasonable incentive for quality work. The other percentages are not the mandated cap for this specific scenario.