In a fixed-price incentive fee (FPIF) contract, once the actual cost exceeds the Point of Total Assumption (PTA), the seller is responsible for every additional dollar of cost overrun.
True
False
True. The Point of Total Assumption is calculated for FPIF contracts and marks the cost level beyond which the seller's profit decreases dollar-for-dollar with any further cost overrun. At and beyond the PTA, the buyer's share ratio drops to zero, so the seller fully assumes any additional costs, creating a strong incentive to control expenditures.
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