What is a key characteristic of a cost-reimbursement contract in terms of warranties?

A key characteristic of a cost-reimbursement contract is that warranties are commonly excluded except for specific clauses. In this type of contract, the contractor is reimbursed for allowable costs and typically does not assume as much risk as in fixed-price contracts. As a result, warranties that are usually found in fixed-price contracts might not be included to the same extent, since the nature of cost-reimbursement contracts focuses more on reimbursing actual costs incurred rather than guaranteeing specific outcomes or performance levels.

While there may be instances where specific warranties are negotiated and included, they are not the standard expectation within cost reimbursement arrangements. This reflects the contract's inherent nature, where the government expects to pay for costs incurred rather than hold the contractor to performance guarantees typical of more predictable contract types.