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Question:
Which contract type poses a higher risk for the customers?
A
Cost-reimbursable.
explanation
Cost-reimbursable contracts are a type of contract where the customer reimburses the contractor for all of their costs, plus a fee. This means that the customer is responsible for any unforeseen costs that arise during the project.
Fixed-price contracts, on the other hand, are a type of contract where the contractor agrees to complete the project for a set price. This means that the contractor is responsible for any unforeseen costs that arise during the project.
Therefore, cost-reimbursable contracts pose a higher risk for customers because they are responsible for any unforeseen costs. This risk can be mitigated by carefully defining the scope of work and the deliverables in the contract, but it is still present.
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