A cost-type contract is a specific agreement under which a contractor is compensated based on the actual costs incurred during the performance of the contract. This type of contract may include a fee, but the primary basis for payment is the costs that the contractor can document. Cost-type contracts are commonly used in government contracts and grants, where precise cost estimation can be challenging.
Cost-type contracts are often utilized in various legal contexts, particularly in government contracting and grant management. They are prevalent in fields such as construction, research, and development, where costs can vary significantly. Users may encounter forms related to these contracts, which can be managed with legal templates from US Legal Forms, allowing individuals to navigate the complexities of contract law effectively.
Here are a couple of examples of abatement:
Example 1: A research institution enters into a cost-type contract with a federal agency to conduct a study. The institution is reimbursed for all eligible expenses incurred during the research, plus a predetermined fee.
Example 2: A construction company is awarded a cost-type contract for a public infrastructure project, where they are paid for the actual costs of materials and labor, along with a profit margin based on those costs. (hypothetical example)
Cost-type contracts are governed by federal regulations, particularly under Title 49 of the Code of Federal Regulations (CFR) and other applicable federal contracting laws. Specific statutes may vary based on the nature of the work and the funding source.
| Term | Definition | Key Differences |
|---|---|---|
| Fixed-price contract | A contract where the contractor is paid a set price regardless of actual costs. | Cost-type contracts reimburse actual costs, while fixed-price contracts do not. |
| Time and materials contract | A contract that pays for labor and materials used, often with a cap on total costs. | Time and materials contracts focus on labor and materials, while cost-type contracts include all incurred costs. |
If you are entering into a cost-type contract, ensure you maintain thorough documentation of all costs incurred. Consider using US Legal Forms to access templates that can help you draft or manage your contract effectively. If the situation becomes complex, consulting with a legal professional is advisable to ensure compliance with all relevant laws and regulations.
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A cost-type contract is an agreement where a contractor is paid based on the actual costs incurred during the project, potentially plus a fee.