It is relatively common for a Cost Plus contract to include a fee retainage clause. For example, a contract may have a 5% fee but the contractor is required to retain, or not bill, 15% of that fee each billing period. Most often this retained fee is accounted for as revenue in the period earned and as an unbilled receivable. When the contract is complete and the contractor has performed up to contract standards, the retained fee may be billed.
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