That sounds like a cost-plus contract[1], where they pay for allowable expenses plus some amount of profit. It is a common way of structuring government contrac

That sounds like a cost-plus contract[1], where they pay for allowable expenses plus some amount of profit. It is a common way of structuring government contracts, but it is not the only way. [1] https://en.wikipedia.org/wiki/Cost-plus_contract https://en.wikipedia.org/wiki/Cost-plus_contract