Yeah, cost plus a fixed fee or an award fee are common. But cost plus percentage is illegal, I believe. While cost plus fixed doesn't encourage the contractor

Yeah, cost plus a fixed fee or an award fee are common. But cost plus percentage is illegal, I believe. While cost plus fixed doesn't encourage the contractor to look for ways to be more efficient, it doesn't reward him for being wasteful, either. But cost plus percentage actually rewards a contractor for wasting money! That's why it's illegal.