What type of contract compensates for all resource costs plus a fee for the vendor?

The type of contract that compensates for all resource costs plus a fee for the vendor is a cost-plus contract. This arrangement allows for reimbursement of the actual costs incurred by the vendor while also providing an additional fee, which is often a percentage of the costs or a fixed amount, to cover their profit.

Cost-plus contracts are particularly useful in projects where the scope is uncertain or prone to changes, making it difficult to estimate total costs in advance. This type of contract offers flexibility for both the buyer and vendor, ensuring that the vendor is compensated for all incurred expenses in addition to a predetermined profit margin.

In contrast, time and materials contracts are based on hourly rates for labor and actual material costs, while fixed-price contracts set a firm price that does not change regardless of the actual costs incurred. Unit price contracts focus on the cost per unit of work rather than total costs and fees. Each of these alternatives has its own specific applications and implications for project management.