but as an additional amount which rises in bandings in line with the contractor's cost increases may effectively constitute a "cost plus percentage of cost" contract and therefore fall within the prohibition. Usage A cost-reimbursement contract is appropriate when it is desirable to shift some risk of successful contract performance from the contractor to the buyer. It is used most commonly when the item purchased cannot be defined explicitly, as for research and development, or for cases where there is not enough data to estimate the final cost accurately. Pros and cons Advantages: A cost-type contract is often used for research and development efforts where technical requirements and specifications are very general, vague, uncertain or unknown, or circumstances do not allow the requiring organization to define its requirements sufficiently to allow for a fixed-price type contract, or uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract. Cost plus contracting was expanded to include services such as engineering, consulting, and a variety of other such efforts. in the 1980's. A cost-plus contract is often used when performance, quality or delivery time is a much greater concern than cost, such as in the United States space program. Final cost may be less than for a fixed price contract because contractors do not have to increase the price to cover their risk, especially when the ability to estimate costs is low. However, because of the aspect of the government withholding final payment until closeout of the contract in question, this can increase the ultimate cost of a contract effort because of the ability of a provider to bill for increased overhead and general and administrative costs, increased wages, and many other costs which can be passed on to the government after the contract has been performed. There is also the cost to the government of conducting audits of the providers to ensure that costs being claimed are consistent with the cost accounting rules of doing business with the government. Final cost may be less than for a fixed price contract when there is little market or price competition. Allows more oversight and control of the quality of the contractor's work while increasing the cost of oversight by either the government or by outside consultants. Flexible, allowing for changes of specification within the contractual scope of work. Disadvantages: There is limited