High Point North Carolina Construction Contract Cost Plus or Fixed Fee: Explained In High Point, North Carolina, construction contracts typically involve two common types of payment arrangements: Cost Plus and Fixed Fee. These contracts determine how the contractor will be compensated for their services and expenses during a construction project. 1. Cost Plus Contract: A Cost Plus contract, also known as a Cost Reimbursement Contract, is an agreement where the contractor is reimbursed for the actual costs incurred in the construction process. This type of contract includes all expenses such as labor, materials, equipment, subcontractors, permits, and other related costs. In addition to the costs, the contractor receives a predetermined percentage or a fixed fee as a profit margin on top of the expenses. 2. Fixed Fee Contract: A Fixed Fee contract, also referred to as a Lump-Sum contract, involves a set price for the entire construction project. In this arrangement, the contractor provides an estimate based on the scope of work and specifications provided by the client. The fixed fee is calculated considering the anticipated costs, overheads, profit, and contingencies. Any changes or modifications to the project during construction are typically dealt with through change orders and cost adjustments. Both Cost Plus and Fixed Fee contracts have advantages and considerations that clients and contractors should evaluate before entering into an agreement. The choice between these contract types depends on factors such as the project's complexity, potential changes in scope, the level of detail in design documents, and the level of risk both parties are willing to assume. Additional types of construction contracts used in High Point, North Carolina, include: 1. Time and Materials (T&M) Contract: A Time and Materials contract is similar to a Cost Plus contract but differs in the way the contractor is compensated. In T&M contracts, the contractor is paid for the actual time spent on the project based on predefined hourly rates, plus the cost of materials and other agreed-upon expenses. 2. Guaranteed Maximum Price (GMP) Contract: Under a Guaranteed Maximum Price contract, the contractor guarantees that the project will not exceed a predetermined maximum price. The contractor is responsible for managing the project costs within this cap, and any savings realized become shared or returned to the client. 3. Unit Price Contract: In a Unit Price contract, the project is segmented into specific tasks or items, each assigned a predefined unit price. The contractor is paid based on the quantities of each unit completed. This type of contract is commonly used when there is uncertainty about the quantities required for certain tasks or items. In High Point, North Carolina, construction contracts can vary based on project-specific requirements and the preferences of both the client and contractor. It is essential to carefully review contract terms, clarify expectations, and seek legal advice before finalizing any construction agreement.
High Point North Carolina Construction Contract Cost Plus or Fixed Fee
Description
How to fill out High Point North Carolina Construction Contract Cost Plus Or Fixed Fee?
If you are searching for a relevant form, it’s difficult to choose a better platform than the US Legal Forms site – one of the most extensive libraries on the internet. With this library, you can find a huge number of form samples for business and personal purposes by types and regions, or key phrases. With the advanced search feature, finding the most recent High Point North Carolina Construction Contract Cost Plus or Fixed Fee is as elementary as 1-2-3. Additionally, the relevance of each and every file is proved by a team of expert attorneys that on a regular basis check the templates on our platform and update them according to the latest state and county requirements.
If you already know about our platform and have a registered account, all you should do to receive the High Point North Carolina Construction Contract Cost Plus or Fixed Fee is to log in to your profile and click the Download option.
If you use US Legal Forms the very first time, just follow the instructions below:
- Make sure you have found the sample you want. Look at its explanation and use the Preview option (if available) to see its content. If it doesn’t meet your requirements, use the Search field at the top of the screen to get the appropriate record.
- Confirm your choice. Click the Buy now option. Following that, select the preferred pricing plan and provide credentials to sign up for an account.
- Process the financial transaction. Make use of your bank card or PayPal account to complete the registration procedure.
- Receive the template. Pick the format and save it on your device.
- Make modifications. Fill out, revise, print, and sign the obtained High Point North Carolina Construction Contract Cost Plus or Fixed Fee.
Every single template you save in your profile does not have an expiration date and is yours permanently. You can easily gain access to them using the My Forms menu, so if you want to have an additional version for modifying or creating a hard copy, you can come back and download it once again at any time.
Take advantage of the US Legal Forms extensive collection to gain access to the High Point North Carolina Construction Contract Cost Plus or Fixed Fee you were looking for and a huge number of other professional and state-specific samples in one place!
Form popularity
FAQ
Unlike a fixed-cost construction contract, a cost-plus construction agreement is a contract in which the owner pays the contractor the actual costs of the materials and labor plus an additional negotiated fee or percentage over that amount.
Cost-plus contracts are generally used if the party drawing up the contract has budgetary restrictions or if the overall scope of the work can't be properly estimated in advance. In construction, cost-plus contracts are drawn up so contractors can be reimbursed for almost every expense actually incurred on a project.
A: As an example, a cost-plus contract may establish that the total estimated cost of a building project is $10 million plus a fixed fee of $1.5 million, roughly 15% of the total cost, as the contractor's profit. So the total expense to the buyer would be approximately $11.5 million ?the cost plus the fee.
Types Cost plus fixed-fee (CPFF) contracts pay costs plus a pre-determined fee that was agreed upon at the time of contract formation. Cost-plus-incentive fee (CPIF) contracts have a larger fee awarded for contracts which meet or exceed certain performance goals, for example being on schedule and any cost savings.
Budget: A fixed-price contract is just that: fixed. The agreed-on price at the beginning of the project is the price at the end. Conversely, a cost-plus contract estimates a project's costs but doesn't set the final price until the project is completed.
What Is a Cost-Plus Contract? A cost-plus contract is one in which the contractor is paid for all of a project's expenses plus an additional fee for the job. The additional fee is intended to be the contractor's profit.
Cost plus fixed fee contracts can be used when both the contractor and the owner agree that the contractor is entitled to a fee in addition to the project expenses.
plus contract includes the cost of goods sold (COGS), including materials and labor, as well as overhead, such as administrative costs, insurance, permits, transportation and utilities. plus contract also stipulates the contractor's profit, typically a fixed fee or percentage of the project total.
If the Actual Cost is higher than the Target Cost, say 1,100, the client will pay: 1,100 + 100 + (1,000 - 1,100) 0.2 = 1,180 (contractor earns 80). If the Actual Cost is lower than the Target Cost, say 900, the client will pay: 900 + 100 + (1,000 - 900) 0.4 = 1,040 (contractor earns 140).
Fixed-Price Contract vs Cost Plus Contract The Cost-Plus Contract price is not fixed and the Builder only has to give the Owner a reasonable estimate of the works. The estimate is ascertained by adding a profit margin to the actual cost of direct materials, labour and expenses.