Cost plus fixed fee - Actual costs plus profit margin for seller - cost overrun represents risk to buyer Cost plus incentive fee - Actual cost plus a profit margin for seller - cost overrun represent risk to the buyer Cost plus award fee - Actual costs plus an award based on seller-defined objectives for the project -  Buyer carries the risk, as the seller is the judge of the contract work and performance. Cost plus percentage of costs - Actual costs plus profit for seller - cost overrun represent risk to the buyer. This is the most dangerous contract type for the buyer.