I am sure there are exceptions. Let me try to add some clarity, from my work experience. Cost Plus work is only done when there is risk. It is monitored on a

I am sure there are exceptions. Let me try to add some clarity, from my work experience. Cost Plus work is only done when there is risk. It is monitored on a cost and schedule basis by the customer (govt). At certain cost milestones, there is a decision to stop, add more money, change requirements; deal with reality after more has been learned about the problem. It is agile to the extreme (from the development lifecycle perspective). As a government contractor it is extremely bad for business to not deliver on a cost plus contract (meaning your customer has exhausted his budget; not what he originally OK'd you starting with). In this case the contractor can not finish the work and take a loss, as that is against the FAR. What happens is the customer is stuck and, in general, they remember. Now, if you are the only game in town, perhaps it is a way to force the govt to throw you more cash. Most contracts are not like this.