Cost Plus
Cost Plus is a type of contract where the contractor gets paid for all their actual costs (like materials and labor), plus an additional agreed-upon amount for profit. This is different from fixed-price contracts because the final cost isn't set at the beginning. It's often used in construction, government work, or projects where the exact costs are hard to predict. Other names for this include "cost-plus-fee," "cost reimbursement," or "time and materials plus profit." This approach helps protect contractors when project costs are uncertain while giving clients transparency into all expenses.
Examples in Resumes
Managed $5M Cost Plus contract for government facility renovation
Negotiated Cost Plus agreements with subcontractors on major infrastructure projects
Led team of estimators for Cost-Plus and Cost Plus Fixed Fee contracts
Typical job title: "Contract Managers"
Also try searching for:
Where to Find Contract Managers
Professional Organizations
Job Boards
Professional Networks
Example Interview Questions
Senior Level Questions
Q: How do you handle risk management in Cost Plus contracts?
Expected Answer: Should discuss methods for tracking costs, establishing clear documentation processes, regular client communication, and systems for early problem detection. Should mention experience with contract modifications and change orders.
Q: What strategies do you use to maintain profitability while ensuring client satisfaction in Cost Plus projects?
Expected Answer: Should explain balancing transparent cost reporting with efficient resource management, methods for controlling overhead costs, and maintaining good client relationships through clear communication.
Mid Level Questions
Q: Explain the difference between Cost Plus Fixed Fee and Cost Plus Award Fee contracts.
Expected Answer: Should explain that Fixed Fee provides a set profit percentage, while Award Fee ties additional profit to performance metrics. Should demonstrate understanding of when each type is appropriate.
Q: How do you track and report costs in a Cost Plus contract?
Expected Answer: Should describe systems for documenting direct and indirect costs, regular reporting procedures, and methods for keeping clients informed about spending progress.
Junior Level Questions
Q: What are the basic components of a Cost Plus contract?
Expected Answer: Should identify the main elements: direct costs, indirect costs, and the agreed-upon profit or fee structure. Should understand basic principles of cost documentation.
Q: How do you determine which costs are allowable in a Cost Plus contract?
Expected Answer: Should demonstrate understanding of common allowable costs like labor and materials, versus non-allowable costs, and knowledge of basic contract terms and conditions.
Experience Level Indicators
Junior (0-2 years)
- Basic contract documentation
- Cost tracking and reporting
- Understanding of allowable costs
- Basic budget monitoring
Mid (2-5 years)
- Contract negotiation
- Detailed cost analysis
- Subcontractor management
- Change order processing
Senior (5+ years)
- Risk management
- Complex contract administration
- Client relationship management
- Strategic planning and oversight
Red Flags to Watch For
- No experience with cost tracking or reporting
- Lack of understanding of allowable versus non-allowable costs
- Poor communication skills
- No familiarity with contract documentation requirements
- Unable to explain basic contract terms
Related Terms
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