Mississippi Cost Plus Fixed Fee Construction Contract
What is this form?
The Cost Plus Fixed Fee Construction Contract is a legal agreement between a property owner and a contractor. This contract outlines the responsibilities and rights of both parties during construction projects where the contractor is reimbursed for actual costs incurred plus a fixed fee. This form is distinct from fixed-price contracts as it allows for more flexibility in billing for actual expenses, making it suitable for complex or uncertain projects.
Form components explained
- Agreement terms outlining the roles of the owner and contractor.
- Clauses detailing permit responsibilities and soil condition evaluations.
- Insurance requirements during the construction project.
- Procedures for changing the scope of work and related costs.
- Payment request protocols and timelines.
- Provisions for lien waivers and warranty on workmanship.
When this form is needed
This form should be used when embarking on construction projects that do not have a specified total price upfront. Ideal situations include projects with uncertain costs due to variable materials, labor issues, or design changes. The Cost Plus Fixed Fee Construction Contract helps ensure transparency and allows for adjustments to the project cost as it evolves.
Intended users of this form
- Property owners looking to hire a contractor for construction or renovation projects.
- Contractors seeking a clear contractual foundation for their services.
- Subcontractors or suppliers wanting to understand their rights and obligations in the context of the main contract.
Instructions for completing this form
- Identify and fill in the names and contact information of both parties, the owner and the contractor.
- Specify the property location and describe the scope of work to be performed.
- Detail the payment structure, including how costs will be calculated and the fixed fee arrangement.
- Include any relevant clauses about insurance and permits required for the project.
- Both parties should sign and date the contract after reviewing all terms carefully.
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.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes
- Failing to define the scope of work clearly, leading to disputes later.
- Not including terms about changes to the project scope.
- Neglecting to outline payment terms or timelines for completion.
Why complete this form online
- Immediate access to a professionally drafted contract tailored for construction projects.
- Convenience of downloading and editing the form to fit specific project needs.
- Time-saving by reducing the need for in-person meetings with legal advisors.
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FAQ
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.
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 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 percentage of cost contract or CPPC is a cost reimbursement contract containing some element that obligates the non-state entity to pay the contractor an amount, undetermined at the time the contract was made and to be incurred in the future, based on a percentage of future costs.
Determine your COGS (cost of goods sold). For example $40 . Find out your gross profit by subtracting the cost from the revenue. Divide profit by COGS. Express it as a percentage: 0.25 100 = 25% . This is how to find markup... or simply use our markup calculator!
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-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.
Disadvantages of cost-plus fixed-fee contracts may include: The final, overall cost may not be very clear at the beginning of negotiations. May require additional administration or oversight of the project to ensure that the contractor is factoring in the various cost factors.
