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 New Hampshire: scope of work, work site, warranty and insurance.
Title: Understanding Manchester New Hampshire Construction Contract Cost Plus or Fixed Fee Keywords: Manchester New Hampshire, Construction Contract, Cost Plus, Fixed Fee, Types Introduction: A well-executed construction contract is crucial to ensure a successful project outcome in Manchester, New Hampshire. Among the various types of construction contracts, Cost Plus and Fixed Fee contracts are widely used in the industry. In this article, we will delve into the details of these two contract types and explore their application in Manchester, New Hampshire's construction projects. 1. Cost Plus Construction Contract: A Cost Plus construction contract is based on the actual cost of labor, materials, and other expenses incurred during the project, along with a predetermined percentage fee for profit and overhead. Here are some key points to consider regarding Cost Plus contracts: a. Cost Transparency: This contract type provides a high level of transparency as it allows the client to see the actual costs involved in the project. This transparency helps build trust between the parties involved. b. Flexibility: Cost Plus contracts offer flexibility in terms of project changes and modifications. The client can request alterations, additions, or adjustments during the construction process, knowing they will be reflected in the final cost. c. Collaborative Approach: This contract type promotes collaboration between the client and contractor, fostering a cooperative working environment aimed at achieving project objectives. 2. Fixed Fee Construction Contract: A Fixed Fee construction contract, also known as a lump sum contract, involves a fixed price for the overall project. Here are some important aspects of Fixed Fee contracts: a. Defined Costs: Unlike Cost Plus contracts, Fixed Fee contracts set a predetermined price for the project, allowing the client to have a clear understanding of the total cost from the beginning. b. Project Scope: A Fixed Fee contract requires a detailed project scope and specifications to determine the fixed price accurately. Any changes or modifications may incur additional costs or contract amendments. c. Risk Allocation: In Fixed Fee contracts, the risk is typically allocated to the contractor. Any unexpected costs or variations in the project could affect the contractor's profit margin. Types of Manchester New Hampshire Construction Contract Cost Plus or Fixed Fee: 1. Guaranteed Maximum Price (GMP): This type of Cost Plus contract sets a maximum limit for the overall project cost. Any savings achieved by the contractor are usually shared between the contractor and the client, fostering cost-conscious construction practices. 2. Unit Price Contract: Under this type of contract, the contractor and client agree upon a specific unit price for each item or quantity of work, which is then multiplied by the actual quantity used during the project. It offers flexibility in cost allocation based on the actual work performed. Conclusion: Manchester, New Hampshire construction projects can benefit from both Cost Plus and Fixed Fee construction contracts, each suited to different project requirements and client preferences. While Cost Plus contracts provide transparency and flexibility, Fixed Fee contracts offer cost predictability and can be beneficial for well-defined projects. Selecting the most suitable contract type for a specific project is paramount for maintaining a successful contractor-client relationship and achieving project goals.
