Cost Plus Contract For Construction Company
Description
How to fill out Colorado Construction Contract Cost Plus Or Fixed Fee?
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Types of contractsFixed-price contract.Cost-reimbursement contract.Cost-plus contract.Time and materials contract.Unit price contract.Bilateral contract.Unilateral contract.Implied contract.More items...?4 Sept 2020
Cost Plus Contract Disadvantages For the buyer, the major disadvantage of this type of contract is the risk for paying much more than expected on materials. The contractor also has less incentive to be efficient since they will profit either way.
Cost plus percentage of cost is a method contractors often use to price services. This type of contract specifies that the buyer must pay all the project costs incurred by the seller, plus an additional amount for profit.
Cost Plus Contract Disadvantages For the buyer, the major disadvantage of this type of contract is the risk for paying much more than expected on materials. The contractor also has less incentive to be efficient since they will profit either way.
plus contract is one in which the contractor is paid for all of a project's expenses plus an additional fee for the job. The additional fee is intended to be the contractor's profit.