Cost Reimbursable contracts

Cost Reimbursable contracts

When the scope of work is not well known at the start and can change as the work progresses, or when the risk is high, then we must use a Cost Reimbursable contract. In this type of contract the organization agrees to pay the contractor for the cost of performing the service or providing the goods. The organization pays the contractor for allowable expenses related to performing the work. In this contract, since the buyers pays for all cost, he bears the risk, but he there is a better cost control when there is not a well-defined scope.

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