If the government wants to contract a very large scale project with significant uncertainty about what the final cost will be; often a cost-plus contract is awarded to attract qualified contractors who may otherwise not be willing to accept the risks inherent in a guaranteed bid price.

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Quizplus · Accepted Answer

A cost-plus contract allows the contractor to be reimbursed for all of their allowable expenses and then receive additional payment as a percentage of the total cost of the project. This type of contract is often used for large-scale projects with significant uncertainty about the final cost. It can be beneficial for attracting qualified contractors who may be hesitant to accept the risks of a guaranteed bid price.

If the Government Wants to Contract a Very Large Scale