Cost Plus Contracts are frequently used with the US Government due primarily to the unknown risks inherent in those projects
Cost Plus Fee (CPF) or Cost Plus Percentage of Cost
Seller is reimbursed for all costs
The seller gets a percentage fee above the costs
Cost Plus Fixed Fee (CPFF)
Seller is reimbursed for all costs
The Seller gets a fixed fee above costs
Cost Plus Incentive Fee (CPIF)
Seller is reimbursed for all costs
The Seller’s fee can increase if incentive is met
Cost Plus Award Fee (CPAF)
Seller is reimbursed for all costs
The Seller’s fee can increase if expectations are exceeded