This form is a Construction Contract that may be executed with either a cost plus or fixed fee payment arrangement. The form contains the following additional subject matters and complies with the laws of the State of Florida: scope of work, work site, warranty and insurance.
Cost plus construction with fee, also known as cost plus fee construction, is a pricing method commonly used in the construction industry. This approach involves clients paying for the direct costs of construction materials, labor, and subcontractors, along with an additional fee to cover the contractor's overhead expenses and profit margins. Below is a breakdown of the various types of cost plus construction with fee: 1. Cost Plus Fixed Fee (CUFF): This type of cost plus construction includes a fixed fee negotiated between the client and the contractor. The fee, typically expressed as a percentage of the total project cost or a fixed amount, is agreed upon upfront and remains fixed throughout the project. 2. Cost Plus Percentage Fee (CPF): In this variant, the contractor's fee is calculated as a percentage of the total project cost. The percentage may vary depending on the complexity of the project, the contractor's expertise, and the level of risk involved. 3. Cost Plus Incentive Fee (CPI): With CPI, the contractor's fee is determined by a pre-established formula based on the project's total cost and performance metrics. This structure incentivizes the contractor to complete the project within budget and ahead of schedule, as it allows for additional fees or bonuses based on their performance. 4. Guaranteed Maximum Price (GMP) Cost Plus Fee: Under this arrangement, the contractor estimates a maximum price for the project, which includes the direct costs and the contractor's fee. If the project is completed below the estimated maximum price, the client benefits from cost savings. However, if the final cost exceeds the guaranteed maximum price, the contractor typically absorbs the additional expenses. Keywords: Construction industry, pricing method, cost plus construction, cost plus fee, direct costs, construction materials, labor, subcontractors, overhead expenses, profit margins, cost plus fixed fee, cost plus percentage fee, cost plus incentive fee, guaranteed maximum price.
