Contracts & ExecutionQuestion 150 of 1605
Under a cost-plus-percentage contract, the contractor's fee is calculated as:
a.A fixed dollar amount set before work begins
b.An hourly wage for the owner's representative
c.A penalty deducted for each day of delay
d.A stated percentage applied to the actual job costs
Explanation
In a cost-plus-percentage contract, the contractor is reimbursed for actual costs and earns a fee equal to an agreed percentage of those costs. The owner bears most of the cost risk.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)