Point of Total Assumption

The point of total assumption (PTA) is a point on the price line of profit-cost curve based on the contract elements of a fixed price as well as incentive-Firm Target (FPI) contract above which the seller effectively bears every one of the costs of a cost overrun. The seller bears each of the cost risk with PTA and further than, due to a dollar for dollar reduction in profit beyond the expense at the PTA.