Which pair of statements is BEST?
A)Cost-plus contracts are prone to budget overruns while turnkey contracts are typically underbid by the contractor.
B)Cost-plus contracts are prone to a budget surplus while turnkey contracts are typically underbid by the contractor.
C)Cost-plus contracts are prone to a budget surplus while turnkey contracts are typically overbid by the contractor.
D)Cost-plus contracts are prone to budget overruns while turnkey contracts are typically overbid by the contractor.

Question

Quizplus · Accepted Answer

Cost-plus contracts involve the contractor being reimbursed for the cost of the project plus a fee, which can lead to a lack of incentive for the contractor to control costs and can result in budget overruns. Turnkey contracts involve the contractor taking on full responsibility for the project and pricing accordingly, which can lead to overbidding to cover potential risks and contingencies.

Which Pair of Statements Is BEST