Contracts & ExecutionQuestion 68 of 690
Which contract type places the MOST financial risk on the contractor?
a.Cost-plus contract
b.Fixed-price (lump sum) contract
c.Time and materials contract
d.Unit price contract
Explanation
Under a fixed-price (lump sum) contract, the contractor agrees to complete the work for a set price regardless of actual costs. If costs exceed the estimate, the contractor absorbs the loss.
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