Certified Research Administrator Practice Exam

What type of subcontract is most suitable for programmatic effort?

1. Firm Fixed Price

2. Cost Reimbursement

3. Time and Material, Labor Hours

4. Cost Sharing

The correct answer is: Cost Reimbursement

The most suitable type of subcontract for programmatic efforts is a cost reimbursement contract. This type of arrangement allows for flexibility and adaptability in project execution, which aligns well with the often variable and evolving nature of programmatic work. In a cost reimbursement contract, the contractor is compensated for their allowable incurred costs to the extent prescribed in the contract, along with a predetermined fee or profit. This structure is particularly beneficial when the scope of work involves uncertainties that can make it difficult to estimate costs accurately at the outset. It provides the contractor with the necessary financial backing to respond to unexpected challenges and changes, fostering innovation and thoroughness in project delivery. In contrast, other subcontract types may impose stricter financial constraints or risk allocations that could hinder programmatic efforts. For instance, a firm fixed price contract sets a fixed total price for the contract, which can be advantageous for well-defined efforts but may not be suitable in cases where the scope of work is not fully established or is likely to change. Similarly, time and materials or labor hours contracts, while allowing for some flexibility, do not incentivize efficiency in the same way as cost reimbursement contracts do. Cost sharing contracts, on the other hand, generally involve shared financial responsibilities that might not effectively support the unique needs of