What is the fundamental difference between a fixed-price and a cost-plus contract?
A) On fixed-price contracts partnering is used while it is not used for cost-plus contracts.
B) On fixed-price contracts macro estimates are used while micro estimates are used for cost-plus contracts.
C) No scope changes are made on fixed-price contracts while scope changes are allowed for cost-plus contracts.
D) On fixed-price contracts the cost is set in advance while for cost-plus contracts it is established after the project is completed.
E) On fixed-price contracts contractors are used while on cost-plus contracts no external contractors are used.

Question

Quizplus · Accepted Answer

The fundamental difference between a fixed-price and a cost-plus contract is that in a fixed-price contract, the cost is predetermined and agreed upon before the project begins, whereas in a cost-plus contract, the final cost is determined after the project is completed, based on actual costs incurred plus a fee or profit margin.

What Is the Fundamental Difference Between a Fixed-Price and a Cost-Plus