Engineering Board Exam Reviewer · ECE · medium
In which type of contract does the OWNER bear the greatest risk of cost overruns?
- Lump-sum
- Firm fixed-price
- Unit-price with fixed quantities
- Cost-plus-percentage-of-cost
Answer
D. Cost-plus-percentage-of-cost
Solution
The contractor's fee rises with cost, giving little incentive to control costs.
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