A negotiated project reimburses the contractor for allowable costs and pays a separately stated fee. Which contract type is being described?
Correct Answer
B) Cost-plus contract
A cost-plus contract reimburses allowable project costs and adds the agreed fee. Other choices describe measured-unit pricing, bid security, or an alternate bid item.
Why This Is the Correct Answer
A cost-plus contract reimburses allowable project costs and adds the agreed fee. Other choices describe measured-unit pricing, bid security, or an alternate bid item.
Why the Other Options Are Wrong
Option A: Unit-price contract
Choice A gives Unit-price contract. Its specific error: the option does not produce the required Cost-plus contract outcome, Cost-plus contract.
Option C: Bid bond
In procurement and contracting, Bid bond is the wrong selection for Cost-plus contract: it names a financial document or payment mechanism, not the Cost-plus contract action/result stated by Cost-plus contract.
Option D: Deductive alternate
The trap in D is Deductive alternate. That selection is wrong because it leaves out the controlling Cost-plus contract result: Cost-plus contract.
Memory Technique
Make cost-plus contract a tabbed card: cite the exact condition, then choose Cost-plus contract.
Reference Hint
Open Construction Project Management, 5th Ed. (2022); use the index entry or section for "Contract types - cost plus" to confirm that A cost-plus contract reimburses allowable project costs and adds the agreed fee.
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