Document background
Cost Plus Contracts are utilized when the scope of work is defined but exact costs cannot be accurately estimated at the project's outset. This contract type, governed by Indian law and regulations, is particularly valuable for complex projects, research and development initiatives, or emergency works where flexibility in cost management is essential. The document establishes a framework for cost reimbursement plus a predetermined profit margin, typically structured as either a fixed fee or percentage markup. It includes comprehensive mechanisms for cost verification, regular reporting, and audit rights to ensure transparency and accountability. The agreement is designed to protect both parties' interests while facilitating project execution with fair compensation for the contractor and cost visibility for the client.
