Businesses should use cost-plus contracts when the projects scope or costs are difficult to estimate up front or when flexibility and transparency are important.
What is the difference between a cost-plus and a fixed-price construction contract?
Most contracts have a cost-plus fee scale of 10-25%. A contractor would use takeoff software to calculate the materials costs, but they wouldnt need to be exact. Some companies use a cost-plus-fixed-fee (CPFF) instead of a percentage.
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