A Cost-Plus Contract is a type of agreement where a contractor is paid for all project costs plus an additional amount for profit. This means that the client covers expenses like materials and labor, and the contractor receives a predetermined fee or percentage on top of those costs. This arrangement is often used in construction and government projects where costs can be unpredictable. This contract type helps ensure that the contractor is compensated for all expenses incurred, reducing the risk of underbidding. However, it can lead to higher overall costs for the client, as there is less incentive for the contractor to minimize expenses.