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Cost-Plus Contract
(redirected from Cost Plus Contracts)

   Also found in: Dictionary/thesaurus, Encyclopedia, Wikipedia 0.01 sec.
Cost-plus contract
A contract in which the selling price is based on the total cost of production plus a fixed percentage or fixed amount.

Cost-Plus Contract
An agreement between a buyer and seller in which the seller agrees to make or produce a good for the buyer. The selling price is the cost to the seller of making or producing the good in addition to some fixed fee or percentage of the cost. See also: Cost-plus pricing.


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Although the Defense Contract Management Agency and the Defense Contract Audit Agency are most commonly used to monitor higher risk contracts, such as cost plus contracts, they are potential resources available to assist program offices in monitoring fixed-price performance-based contracts.
The year-over-year increase in gross profit was primarily due to a higher percentage of overall revenues attributable to higher-margin technology products,an increase in government services margins due to the rate increase on the Company's cost plus contracts, partially offset by increased use of subcontractors in supporting the Government service revenues.
The Company is seeking a greater percentage of its business from cost plus contracts rather than fixed price contracts to avoid the issues of cost overruns.
 
 
 
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