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 with cost basis is a contractual agreement commonly used in construction projects. It establishes a framework between a client (often the owner or developer) and a contractor, where the contractor is compensated for the project costs incurred, along with an additional percentage fee for profit or overhead. The cost basis in this type of contract refers to the actual direct and indirect costs associated with the project. Direct costs include labor, materials, subcontractors, equipment, and any other expenses directly related to the construction work. Indirect costs may include general overhead expenses like insurance, supervision, utilities, permits, and administrative costs. Here are some key features and information related to cost plus percentage contract templates with cost basis: 1. Compensation Structure: The contractor is reimbursed for project costs based on actual expenses incurred. This might include invoices, receipts, or other documentation as evidence of the costs. 2. Percentage Fee: In addition to the project costs, the contractor is entitled to a percentage fee agreed upon in the contract. This fee is typically calculated based on the total project costs. 3. Transparency: A cost plus percentage contract template emphasizes transparency by requiring the contractor to provide detailed records and evidence of all project expenses. This allows the client to verify the legitimacy and accuracy of costs incurred. 4. Project Budget: Although the cost plus percentage contract is based on actual costs, it is common to establish an initial budget at the beginning of the project to provide a baseline for cost control and monitoring. 5. Risk and Award: While this type of contract ensures that the contractor will be compensated for all legitimate costs, it also places the risks associated with cost overruns on the client. Conversely, if the project costs are lower than expected, it can be beneficial for the contractor as they receive a percentage fee. Different types of cost plus percentage contract templates with cost basis: 1. Fixed Percentage Fee: In this variant, the contractor receives a predetermined fixed percentage fee for profit or overhead, irrespective of the project costs incurred. 2. Variable Percentage Fee: This template allows for the percentage fee to be adjusted based on the total project costs. For example, if the costs exceed a certain threshold, the percentage fee might decrease or increase accordingly. 3. Cost Plus Incentive Fee: This type of contract incorporates a performance-based incentive fee in addition to the cost reimbursement and the percentage fee. The incentive fee is a reward for meeting or exceeding specified project objectives, such as completing the project ahead of schedule or under budget. In summary, a cost plus percentage contract template with cost basis is a contractual arrangement used in construction projects where the contractor is reimbursed for project costs and receives a percentage fee for profit or overhead. It promotes transparency and allows the client to validate expenses. Different variations of this contract may have fixed or variable percentage fees, or may include incentive fees based on project performance.
