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Cost plus fixed fee contract example

Construction Contract Cost Plus or Fixed Fee - Washington 2025

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This document is a construction contract between a Contractor and an Owner, outlining the terms and conditions for the completion of a construction project. It details the scope of work, time of completion, payment structure, responsibilities regarding permits and soil conditions, insurance requirements, and procedures for changes to the project. The contract also includes provisions for late payments, damage or destruction of the project, assignment of the contract, and legal interpretations. Additionally, it contains statutory notices regarding customer rights and contractor registration in Washington.

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Click ‘Get Form’ to open it in the editor.
Begin by filling in the Contractor and Owner details, including names and addresses, in the designated fields.
In the 'SCOPE OF WORK' section, clearly describe the project specifications and attach any relevant drawings or documents.
Specify the 'WORK SITE' address where the construction will take place, ensuring accuracy for legal purposes.
Set a timeline for project commencement and completion in the 'TIME OF COMPLETION' section.
Indicate whether you are using a 'COST PLUS' or 'FIXED FEE' payment structure and fill in the corresponding amounts.
Review all sections for completeness and accuracy before finalizing your contract.

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We have answers to the most popular questions from our customers. If you can't find an answer to your question, please contact us.

What is the difference between a cost-plus contract and a fixed-price contract?

A cost plus contract guarantees profit for the contractor. It is stated in the contract that the contractor will be reimbursed for all costs and still generate a profit. Conversely, a fixed price contract establishes a projects price beforehand.

What is a disadvantage of a cost-plus fixed fee contract?

Cost plus construction contracts offer advantages like transparency, flexibility, and reduced contractor risk. They also come with drawbacks, including uncertain pricing, a higher administrative workload, and a greater risk of disputes.

When to use cost-plus fixed fee?

This contract is often used when the scope of the work cannot be precisely defined at the time of the agreement, and there are doubts about potential changes and variations in the course of the project. In a CPFF contract, the buyer agrees to reimburse the supplier for the allowable costs of the project.

What is the percentage of cost-plus in construction contracts?

A CPPC contract is one that is structured to pay the contractor his actual costs incurred on the contract plus a fixed percent for profit or overhead (that is not audited/adjusted) and which is applied to actual costs incurred.

What is a fixed-price contract?

Firm fixed-price contracts are used in situations where the buyer pays the seller a fixed amount, regardless of whether extra costs are incurred or more resources are required in the course of the transaction.

cost plus construction agreement

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Is cost-plus percentage of cost illegal?

A form of contract formerly used but now illegal for use by DoD that provided for a fee or profit as a specified percentage of the contractors actual cost of accomplishing the work to be performed. Sometimes referred to as a cost plus or percentage of cost contract.

What is the difference between fixed-price and cost price?

Fixed price (FP) agreements have fixed payments based on a milestone payment schedule or the submission of deliverables. Cost reimbursement (CR) agreements are paid as costs are incurred and invoiced, typically monthly or quarterly.