What is the importance of cost overruns in government contracts?

Cost overruns are an important consideration when it comes to government contracts. A cost overrun occurs when the total cost of a contract exceeds the original amount allocated for the project. This can be a problem for government contracts because taxpayers’ money is being used to fund the project. When a cost overrun occurs, taxpayers are essentially paying more money than what was originally budgeted to fund the project. In North Carolina, cost overruns are especially important for government contracts because of the state’s restrictions on the amount of money that can be allocated for a particular project. If cost overruns occur, the government must seek additional funding from other sources in order to cover the additional costs. This can lead to delays in project completion and an increase in taxpayer expense. It is important for contractors to exercise caution when bidding on government contracts in order to ensure that the cost of the project does not exceed the amount allocated. In North Carolina, the state government monitors the costs of the projects it has contracted out and provides oversight to ensure that cost overruns are avoided. This helps to ensure that taxpayer funds are being used efficiently and effectively.

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What is the importance of cost overruns in government contracts?

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