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.
A cost plus fee construction contract is an agreement between the owner or client of a construction project and the contractor. In this type of contract, the contractor is reimbursed for all the costs incurred during the construction process, plus an additional fee or percentage of the total cost to cover their overhead and profit. Keywords: cost plus fee construction contract, construction project, contractor, owner, reimbursement, costs, additional fee, overhead, profit. There are two common types of cost plus fee construction contracts: 1. Cost Plus Fixed Fee (CUFF): In this type of contract, the contractor is reimbursed for the actual costs incurred during the construction process, along with a predetermined fixed fee. The fixed fee remains the same throughout the project, regardless of any variations in the actual costs. This type of contract provides a degree of cost certainty for the owner, as they know the maximum fee they will be paying to the contractor. 2. Cost Plus Percentage Fee (CPF): In a cost plus percentage fee contract, the contractor is reimbursed for the actual costs incurred during the construction process, and the fee is calculated as a percentage of the total costs. The percentage fee is agreed upon between the owner and the contractor at the start of the project. This type of contract may provide the contractor with more profit if the project costs exceed the initial estimates, but it can also pose a risk for the owner, as the fee increases with higher costs. Both types of cost plus fee construction contracts require detailed documentation and transparency in cost reporting. The contractor must provide accurate records of all expenses and costs associated with the project, including labor, materials, equipment, and any subcontractor payments. The owner has the right to review these records to ensure that the costs claimed by the contractor are reasonable and necessary. While cost plus fee construction contracts offer more flexibility for changes and variations in the project scope, they may also lead to potential disputes if there are disagreements on what costs should be covered or if the fees charged by the contractor are considered excessive. Therefore, it is essential for both parties to establish clear communication and agreement on the terms and conditions of the contract before commencing the construction project.
