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 Percentage Contract Template for construction is an agreement between a client and a contractor where the client agrees to pay for the actual costs incurred during the construction project, plus a percentage markup as a fee for the contractor's services. This type of contract is commonly utilized when the scope of work may change or when the project specifications are complex, making it difficult to establish a fixed price beforehand. The Cost plus Percentage Contract Template for construction typically includes several key elements. Firstly, it outlines the parties involved, including the client and contractor, along with their contact information and any applicable licenses or permits. It also provides a project description and scope of work, specifying the expected outcomes and deliverables. Next, the contract template will detail the cost reimbursement structure. This includes outlining the various categories of costs, such as labor, materials, equipment, subcontractors, and permits. It may also include provisions for indirect costs, such as overhead and general administrative expenses. The contract should clearly state how these costs will be calculated, documented, and reimbursed. Moreover, the template will specify the percentage fee that the contractor will receive as compensation for their services. The markup percentage can vary depending on the complexity of the project, level of risk, and industry standards. The template should clearly state whether the fee will be applied to all costs or only to certain categories. Additionally, the contract template may address the payment terms, including when and how payments will be made. It is common for the template to stipulate that the client will be responsible for reimbursements on a regular basis, either on a monthly or quarterly basis, depending on the project duration. This helps to maintain transparency and keep the client informed about the ongoing costs. It is important to note that variation exists in Cost plus Percentage Contracts for construction depending on specific requirements or regional practices. Two common types include the Cost plus Fixed Percentage (FP) Contract and the Cost plus Variable Percentage (VP) Contract. 1. Cost plus Fixed Percentage (FP) Contract: In this type of contract, a predetermined fixed percentage is agreed upon between the client and the contractor. This fixed percentage is applied to all costs incurred during the project, regardless of any changes in scope or complexity. The FP contract provides more predictability for the client regarding the final project cost. 2. Cost plus Variable Percentage (VP) Contract: Unlike the FP contract, the VP contract allows for a variable percentage fee based on factors such as project complexity, risk level, or stage-specific budget constraints. The percentage may be subject to change at different stages of the construction process. This type of contract offers increased flexibility for the contractor while being adaptable to project-specific needs. In conclusion, a Cost plus Percentage Contract Template for construction facilitates a transparent and collaborative agreement between a client and a contractor. It ensures that the contractor is compensated fairly for their services while providing flexibility to accommodate changing project requirements. It is essential for both parties to finalize and sign a comprehensive contract that protects their interests and establishes a clear framework for cost reimbursement.
