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What is meant by cost-plus?

A cost-plus contract is an agreement to reimburse a company for expenses incurred plus a specific amount of profit, usually stated as a percentage of the contracts full price.

What is a cost-plus contract in construction?

Unlike a fixed-cost construction contract, a cost-plus construction agreement is a contract in which the owner pays the contractor the actual costs of the materials and labor plus an additional negotiated fee or percentage over that amount.

How do you calculate contract price?

Contract Price = {Actual quantity of the Goods accepted by the Government} x {Rate/Unit Price quoted in paragraph 1(a) above}.

What is a cost-plus percentage of cost contract in construction?

A CPPC contract is one that is structured to pay the contractor his actual costs incurred on the contract plus a fixed percent for profit or overhead (that is not audited/adjusted) and which is applied to actual costs incurred.

What is the difference between a firm fixed-price contract and a cost-plus fixed fee contract?

The specific contract types range from firm-fixed-price, in which the contractor has full responsibility for the performance costs and resulting profit (or loss), to cost-plus-fixed-fee, in which the contractor has minimal responsibility for the performance costs and the negotiated fee (profit) is fixed.

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