CONTRACT TYPES
Three varieties of contracts exist—cost-plus, fixed price, and time and materials.
The cost-plus contract requires payment of costs incurred for the service provided. In some circumstances, pure cost-plus contracts can be modified to include fixed, incentive, and award clauses.
The fixed price contract requires paying a specified amount for the service provided. In some circumstances, pure fixed price contracts can be modified to include escalation, redetermination, and incentive clauses.
The time and material contract requires payment for services using a specified labor rate (e.g., hourly) and materials cost.
A well-written contract offers three benefits. One, it prevents miscommunication between the major parties. Two, it ...
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