What is 'Cost Plus Fixed Fee' in SAP PSM-GPR - Procurement for Public Sector?

Cost Plus Fixed Fee - Overview

• Component: PSM-GPR

• Component Name: Procurement for Public Sector

• Description: A pricing arrangement in which payment by an organization to a supplier consists solely of the supplier's costs plus a fixed fee for requested goods or services. No incentive is given to the supplier to control costs.

Cost Plus Fixed Fee - Details

• 
  Key Concepts: 
  Cost Plus Fixed Fee is a type of contract used in the Public Sector Module of SAP’s GPR Procurement. This type of contract allows the buyer to pay a fixed fee for goods or services, plus an additional fee based on the cost of the goods or services. This type of contract is often used when the cost of the goods or services is uncertain or difficult to estimate. 
  How to Use It: 
  In order to use Cost Plus Fixed Fee contracts in SAP’s GPR Procurement, buyers must first create a contract document that outlines the terms and conditions of the agreement. This document should include the fixed fee amount, as well as any additional fees that will be charged based on the cost of the goods or services. Once the contract document is created, it must be approved by both parties before it can be used. 
  
  Tips & Tricks: 
  When creating a Cost Plus Fixed Fee contract, it is important to ensure that all terms and conditions are clearly outlined in the contract document. This will help to avoid any misunderstandings between the buyer and seller. Additionally, buyers should make sure that they are aware of any additional fees that may be charged based on the cost of the goods or services. 
  
  Related Information: 
  For more information about Cost Plus Fixed Fee