Cost-plus contract

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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.
References in periodicals archive ?
5 million cost plus contract from the United States Army for its Tactical Unmanned Aerial Vehicle (TUAV) development program.
Cost plus contracts, meanwhile, are favored where the scope of work is highly uncertain and the labor, materials, and equipment needed are also uncertain.
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.