Contract - Risk for buyer

What is the highest risk for the buyer

 

Cost plus fix fee (CPFF)

 

or

Cost plus percentage of costs (CPPC)

 

and why

admin's picture

CPCC is highest risk as if the cost increases, the buyer will have to pay % of cost extra. Say you started with $100 project + 10% cost. Your total would be $110. If the cost increases to $200 you will end up paying $220. 

Whereas if you were in CPFF contract you would have paid only $210

thanks that make sens !

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