Don has hired Jerry, a contractor, to complete a portion of his project work. The contract used was a cost-plus contract. If Don were to perform a risk audit, who would carry the risk in this scenario

Don's role as project manager is not what assigns him the financial risk; it is specifically the cost-plus contract structure that places the cost burden on the buyer.

Jerry does not carry the risk under a cost-plus contract because he is made whole for all costs regardless of how high they escalate.

In a cost-plus contract, the contractor is reimbursed for all allowable incurred costs plus an additional fee, meaning the contractor has little incentive to control spending. Don, as the buyer, absorbs any cost overruns because he must pay whatever legitimate costs Jerry incurs, making the contract type - not the role - the deciding factor in who holds the risk.

Being a hired contractor does not inherently transfer financial risk to Jerry; fixed-price contracts assign risk to contractors, not cost-plus contracts.