Master Procurement Contracts in 6 Mins (PMP® Exam Prep)

Struggling to understand the 3 types of contracts in procurement for your PMP exam? This quick guide breaks down everything you need to know about Fixed Price Contracts, Cost Reimbursement Contracts, and Time & Material (T&M) Contracts using simple, everyday examples. ​Whether you are hiring a mechanic, building a house, or taking an Uber, understanding how contract risks shift between the buyer and seller is crucial for project management. ​Topics covered in this video: ​Fixed Price Classifications (FFP, FPIF, FPEPA) ​Cost Reimbursement Breakdowns (CPFF, CPIF, CPAF) ​Time & Material (T&M) limits and risks ​Make sure to save this video for your PMP study sessions and subscribe for more project management breakdowns! ​Video Chapters 00:00 - 3 Major Types of Contracts in Procurement 00:23 - Fixed Price Contracts & Classifications 00:27 - Firm Fixed Price (FFP) 00:59 - Fixed Price Incentive Fee (FPIF) 01:42 - Economic Price Adjustment (FPEPA) 02:11 - Cost Reimbursement Contracts Explained 02:24 - Cost Plus Fixed Fee (CPFF) 03:05 - Cost Plus Incentive Fee (CPIF) 04:02 - Cost Plus Award Fee (CPAF) 04:41 - Time & Material Contracts (T&M) 05:12 - Setting Limits & Risks in T&M Contracts