Compared to a cost plus incentive fee contract,the cost plus percentage fee contract has strong incentives to minimize costs.

Question

Quizplus · Accepted Answer

The cost plus percentage fee contract incentivizes contractors to increase costs, as their fee will also increase based on the percentage of the total cost. This can lead to a lack of motivation to minimize costs and potentially higher project costs for the client. In contrast, the cost plus incentive fee contract provides additional incentives for the contractor to minimize costs and complete the project efficiently.

Compared to a Cost Plus Incentive Fee Contract,the Cost Plus