What type of contracts do owners often use on emergency projects despite the associated risks?

In emergency projects, owners often opt for cost-plus contracts due to the need for flexibility and the unpredictable nature of the project requirements. Cost-plus contracts allow for recovery of costs incurred along with an agreed-upon fee or percentage for the contractor, which is crucial in situations where swift action is needed.

Emergency projects often have unclear scopes and rapid timelines, which makes it challenging to define exact costs in advance. A cost-plus contract mitigates some of the pressure on the owner to estimate these costs upfront, as it allows for immediate mobilization of resources without lengthy negotiations over fixed pricing. This approach can ensure that the project can proceed quickly without delays that could arise from the rigidities of fixed-price contracts, which require detailed scope definition before work can begin.

In contrast, other contract types like fixed-price or design-build may impose constraints that are less suitable for the dynamic and urgent conditions of emergency projects. Time and materials contracts are also less common for emergencies since they can lead to open-ended costs without clear financial limits, which can be risky for owners.