Planning & EstimatingQuestion 619 of 700
When is a cost-plus-fee contract MOST appropriate?
a.When the scope is fully defined and all quantities are certain before bidding.
b.When work must begin before the design is complete, and the owner accepts paying documented actual costs plus an agreed fee.
c.When the owner wants the contractor to carry all cost risk at one fixed price.
d.When public-works law forbids any other arrangement.
Explanation
Correct: cost-plus fits fast-track or poorly-defined scope where a firm price cannot yet be set; the owner reimburses actual costs plus a fee and carries more of the cost risk. A fully defined scope is better suited to lump-sum. Placing all cost risk on the contractor at a fixed price describes lump-sum, not cost-plus. Public-works law does not mandate cost-plus.
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