Government agreed to pay a company whatever it cost to make a product plus a guaranteed percentage of the costs as profit?

This type of agreement is commonly referred to as a cost-plus contract. In this arrangement, the government reimburses the company for its allowable expenses incurred during production and adds a predetermined percentage as profit. This model ensures that the company is covered for its costs while providing an incentive for efficiency, although it can sometimes lead to higher overall expenses for the government if not managed carefully. Cost-plus contracts are often used in situations where project costs are difficult to estimate accurately.