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welcome to act notes tutorials my name is matt i am a contracting officer and i am going to give you a quick tutorial on cost reimbursement contracts what are cost reimbursement contracts cost reimbursement contracts provide for payment of allowable incurred costs to the extent prescribed in the contract these contracts establish an estimate of the total cost for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed except at its own risk without the approval of the contracting officer the definition of a cost reimbursement contract is a contract where all allowable contractor expenses are covered to an agreed upon limit and an additional payment for a profit when should you use a cost reimbursement contract a cost reimbursement contract should be used when there are too many uncertainties in contract performance that will not allow the use of a fixed price contract how to set up a cost reimbursement contract a cost reimbursement contract requir