How is price defined in the context of a contract?

In the context of a contract, price is defined as the cost plus all fee or profit that is applicable to the specific type of contract. This definition incorporates not only the basic costs associated with the goods or services being provided but also includes any additional fees or profit margins that the contractor is entitled to under the terms of the contract.

Understanding price in this broader sense is essential because it reflects the total financial obligation of the government or contracting entity, ensuring transparency and accountability in financial dealings. This perspective also aligns with various contract types (such as cost-plus contracts) where profit is explicitly determined and articulated based on the estimated costs plus any additional agreed-upon fee.

Other options, while they touch on aspects of pricing, do not encapsulate the full scope of what constitutes price in contractual agreements. For instance, focusing solely on total cost of service or base costs ignores the important profit component that is critical in understanding how contractors are compensated.