Cost plus is a contract pricing method where the contractor is paid for actual costs incurred plus an additional amount (usually a percentage) for overhead and profit. This contrasts with fixed-price contracts where the contractor agrees to complete work for a set amount regardless of actual costs. Cost plus contracts shift risk to the owner—if costs increase, so does the contract price. They are typically used when project scope is uncertain or when work conditions are unpredictable. Public procurement generally prefers fixed-price contracts for cost certainty, but cost plus may be appropriate for emergency work, highly uncertain conditions, or when requiring contractor flexibility.