Which of the following statements is true about Cost-Reimbursement contracts?

Cost-Reimbursement contracts are designed to effectively manage projects where the scope may not be precisely defined at the outset. These contracts allow for flexibility in the project scope, enabling adjustments as the project evolves and more information becomes available. This is particularly useful in research and development contexts, where uncertainty is inherent, and project requirements may change as progress is made.

The nature of these contracts ensures that the contractor is reimbursed for allowable costs incurred in the course of the work, plus an additional fee that may vary depending on the agreement. This structure encourages collaboration and adaptability, allowing project managers and teams to respond to changing needs or unexpected challenges that may arise without the constraints of a fixed project scope.

In contrast, other statements suggest limitations that are not inherent to cost-reimbursement contracts. They are not exclusively tied to small projects, and while cost estimation is involved, it does not need to be exhaustive or entirely accurate in advance. Additionally, these contracts do not prevent changes to project scope; rather, they accommodate such changes as necessary.