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The contract was found to be a cost-plus contract with a $65,000 ‘estimate’ and a fixed contractor's fee of $5,000.
This results in a cost-plus contract with a guaranteed maximum price, he explains.
By limiting the number of projects for which it will compete, it will work only on a cost-plus basis where its risk is limited to its fee.
Like most of the contracts awarded, it is structured on a cost-plus basis, meaning the more the company incurs in costs the more profit it makes.
The no-bid contracts with the company are organized on a cost-plus basis, guaranteeing it a set profit over and above whatever it spends.
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