What type of project work typically requires a reimbursable contract?

Reimbursable contracts are typically utilized in situations characterized by uncertainty or where project scope is not clearly defined. This type of contract allows the contractor to be compensated for their actual costs plus a predetermined fee, which accommodates the fluctuations and unpredictability of the project. Since the requirements, risks, and conditions may evolve throughout the project, reimbursable contracts provide flexibility and ensure that contractors are compensated for the time and resources spent adapting to changes.

In the context of risky and unclear projects, it’s important to have a contracting approach that allows for adjustments as the project progresses, which is exactly what a reimbursable contract facilitates. This not only protects the contractor's interests in the face of potential overruns and unexpected challenges but also serves to protect the project owner by ensuring that they are only charged for the work that has been completed and approved.

In contrast, well-defined projects, fixed-scope projects, and low-budget projects are generally more suited to firm-fixed-price contracts, where costs are agreed upon upfront and provide less flexibility for adjustment as the work progresses.