Colorado Construction Contract Cost Plus or Fixed Fee
Overview of this form
The Construction Contract Cost Plus or Fixed Fee is a legal document that outlines a construction agreement between an owner and a contractor. It specifies payment arrangements either as cost plus or a fixed fee. This form is distinct from other construction contracts as it addresses specific components such as scope of work, insurance, and warranty, ensuring compliance with Colorado state laws.
What’s included in this form
- Work site details, including the property location.
- Responsibilities for permits and regulatory approvals.
- Soil condition disclaimers affecting project costs.
- Insurance requirements, including general liability and workers' compensation.
- Provisions for changes to the scope of work through written Change Orders.
- Contract price details for cost plus arrangements.
- Late payment and default terms.
- Warranty statements regarding defects in workmanship.
- Governing law section specifying Colorado laws.
When to use this document
This form should be used when a construction project requires a clear agreement on payment terms, either cost plus or a fixed fee. It is especially beneficial when managing projects where costs may fluctuate based on labor, materials, or scope modifications. Utilize this contract when engaging with contractors for building or remodeling tasks to ensure all parties understand their rights, responsibilities, and the terms of payment.
Intended users of this form
This form is suitable for:
- Property owners looking to engage contractors for construction projects.
- Contractors who need to formalize agreements with property owners.
- Real estate developers managing complex construction agreements.
- Any party involved in a construction project within the jurisdiction of Colorado.
How to complete this form
- Identify the parties involved: enter the names of the owner and contractor.
- Specify the work site: provide the address of the property where the project will take place.
- Detail the scope of work: outline the specific tasks to be completed under this contract.
- Include payment terms: decide if the payment will be cost plus or a fixed fee and specify amounts as necessary.
- Obtain necessary signatures: ensure both parties sign the document to validate the agreement.
Notarization requirements for this form
Notarization is not commonly needed for this form. However, certain documents or local rules may make it necessary. Our notarization service, powered by Notarize, allows you to finalize it securely online anytime, day or night.
Avoid these common issues
- Failing to specify the exact work site location.
- Neglecting to outline all required permits.
- Not including clear terms for changes to the project scope.
- Omitting signatures or dates can render the agreement ineffective.
- Overlooking the details of insurance requirements.
Why use this form online
- Convenient access to legally vetted templates by licensed attorneys.
- Editable fields allow for customization based on your specific needs.
- 24/7 availability makes it easy to fill out and download the form at your convenience.
- Streamlined process minimizes the risk of errors and omissions.
Form popularity
FAQ
A Cost-Based Pricing Example Suppose that a company sells a product for $1, and that $1 includes all the costs that go into making and marketing the product. The company may then add a percentage on top of that $1 as the "plus" part of cost-plus pricing. That portion of the price is the company's profit.
A fixed-price contract is a type of contract where the payment amount does not depend on resources used or time expended. This is opposed to a cost-plus contract, which is intended to cover the costs with additional profit made.
In the cost plus a percentage arrangement, the contractor bills the client for his direct costs for labor, materials, and subs, plus a percentage to cover his overhead and profit. Markups might range anywhere from 10% to 25%.
A cost-plus contract, also known as a cost-reimbursement contract, is a form of contract wherein the contractor is paid for all of their construction-related expenses. Plus, the contractor is paid a specific agreed-upon amount for profit.
A cost-plus fixed fee contract is a specific type of contract wherein the contractor is paid for the normal expenses for a project, plus an additional fixed fee for their services.
Cost Plus Contract Disadvantages For the buyer, the major disadvantage of this type of contract is the risk for paying much more than expected on materials. The contractor also has less incentive to be efficient since they will profit either way.
A fixed price contract sets a total price for all construction-related activities during a project. Many fixed price contracts include benefits for early termination and penalties for a late termination to give the contractors incentives to ensure the project is completed on time and within scope.
A cost-plus contract is an agreement to reimburse a company for expenses incurred plus a specific amount of profit, usually stated as a percentage of the contract's full price.
