This is the most common bidding contract and therefore will require time and money to develop the bid. Any changes in the requirements, such as a change of venue, may be very costly to the event management. This is common for entrepreneurial events when there is a ticket charge and the entertainment supplier will get a 'percentage of the door'. Incentives can be included in the Cost Plus or the Fixed Price contract. This contingency amount is important in special events or when the resources are needed earlier than allowed for in the planning as it can be used as an incentive.
Many contracts are a mixture of the three types described.
A venue contracted could be a fixed fee plus costs with a percentage of the profits. Having the vendor benefit from the financial success of the event often means a reduction in the fixed fee. Put simply, it is spreading the risk. The ability to negotiate these types of mixed contracts to the satisfaction of all the parties is an art form. Without the necessary skills it can take up a lot of time and result in a loss of goodwill.