Cost Plus Construction With Fee
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How to fill out Florida Construction Contract Cost Plus Or Fixed Fee?
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FAQ
A: As an example, a cost-plus contract may establish that the total estimated cost of a building project is $10 million plus a fixed fee of $1.5 million, roughly 15% of the total cost, as the contractor's profit. So the total expense to the buyer would be approximately $11.5 million ?the cost plus the fee.
Here are four main construction contracts to choose from, plus their pros and cons: Lump-Sum Contracts. Cost-Plus-Fee Contracts. Guaranteed Maximum Price Contracts. Unit-Price Contracts.
Cost plus percentage contracts are invoices that charges the cost of the materials plus a percentage of the total materials used. These are typically used for custom work and where the amount of materials needed is not readily estimated.
In addition to this, the buyer also pays a pre-negotiated fixed fee, which represents the contractor's profit. The formula for cost plus fixed fee calculation is: Total Contract Value = Actual Costs + Fixed Fee.
A: As an example, a cost-plus contract may establish that the total estimated cost of a building project is $10 million plus a fixed fee of $1.5 million, roughly 15% of the total cost, as the contractor's profit. So the total expense to the buyer would be approximately $11.5 million ?the cost plus the fee.