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 Arizona: scope of work, work site, warranty and insurance.
Phoenix Arizona Construction Contract Cost Plus or Fixed Fee is a contractual agreement between a construction company and a client in the Phoenix, Arizona area. This type of contract outlines the details regarding the cost and payment terms for construction projects. Two primary types of contracts commonly used in Phoenix, Arizona, are the Cost Plus Contract and the Fixed Fee Contract. The Cost Plus Contract is a type of construction contract that calculates the construction cost based on actual expenses incurred during the project. In this type of agreement, the contractor is reimbursed for all incurred costs, including labor, materials, equipment, and subcontractors. Additionally, a predetermined percentage of the total cost, known as a fee, is added to cover the contractor's overhead and profit. This fee can either be a percentage of the total project cost or a negotiated flat fee. Cost Plus Contracts are frequently used in situations where the scope of the project is unclear or where the client desires more involvement in the decision-making process. On the other hand, the Fixed Fee Contract is a type of construction contract wherein the construction company agrees to complete the project for a predetermined fixed price. This fixed price is determined based on the estimated cost of construction, including labor, materials, and overhead expenses. However, unlike the Cost Plus Contract, any cost overruns or unforeseen expenses are absorbed by the contractor. The Fixed Fee Contract is commonly utilized when the project scope is clear and well-defined, and both parties have a comprehensive understanding of the project requirements. Both of these types of contracts have their advantages and disadvantages. The Cost Plus Contract provides more transparency, allowing the client to have visibility into all costs incurred during the construction process. It also provides more flexibility for changes or modifications to the project scope. However, the potential downside for the client is that it may end up paying more if the project experiences cost overruns. On the other hand, the Fixed Fee Contract offers the client more certainty in terms of the project cost, as any unforeseen expenses are the responsibility of the contractor. However, this type of contract may lack the flexibility for changes or modifications during the construction process. In conclusion, Phoenix Arizona Construction Contract Cost Plus or Fixed Fee refers to the contractual agreement between a construction company and a client in Phoenix, Arizona, specifying the method of calculating the project cost and payment terms. The Cost Plus Contract calculates costs based on actual expenses, with an additional agreed-upon fee. The Fixed Fee Contract, on the other hand, sets a predetermined fixed price for completing the project.
