Final answer:
The most risky cost plus contract type for the owner is the cost + fixed fee + profit sharing.
Step-by-step explanation:
The cost plus contract types are a common method used in construction projects, where the total cost of the project is determined by adding the cost of materials, labor, and other expenses to a fixed fee and profit for the contractor.
Of the four cost-plus contract types mentioned, the cost + fixed fee + profit sharing is the one that poses the most risk to the owner. In this type of contract, the owner not only pays a fixed fee to the contractor but also shares a percentage of the profits. This means that if the project exceeds the estimated costs, the owner may have to pay additional fees, resulting in increased risk.
On the other hand, the lump sum contract type transfers most of the risk to the contractor, as they agree to complete the project for a fixed amount regardless of the actual costs. The unit price contract type involves paying for individual units or quantities of work, which reduces the owner's risk compared to other contract types.