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Cost-Plus-Fixed-Fee Contract

oboloo Glossary

Cost-Plus-Fixed-Fee Contract

A Cost-Plus-Fixed-Fee Contract is a type of business agreement in which the value of a project is determined by adding together the cost of materials and labor, plus a fixed fee that covers overhead costs. This type of contract allows businesses to establish a set price for a project or service without worrying about unexpected expenses or risks. By agreeing on a fixed fee beforehand, both the customer and provider can be sure that they are getting a fair deal and will not face any surprises later on. The fixed fee also provides an incentive for the provider to be efficient and complete the job in a timely manner. In short, a Cost-Plus-Fixed-Fee Contract is an excellent way to negotiate a fair, predictable price for any project or service.

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