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There are three basic types of pricing arrangements in construction contracts: (1) stipulated sum (also known as fixed price or lump sum), (2) cost plus (with or without a guaranteed maximum or not-to-exceed price), and (3) unit price.
The construction contract price includes the direct project cost including field supervision expenses plus the markup imposed by contractors for general overhead expenses and profit. The factors influencing a facility price will vary by type of facility and location as well.
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.
Disadvantages of cost-plus fixed-fee contracts may include: The final, overall cost may not be very clear at the beginning of negotiations. May require additional administration or oversight of the project to ensure that the contractor is factoring in the various cost factors.
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.

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Contract Price = {Actual quantity of the Goods accepted by the Government} x {Rate/Unit Price quoted in paragraph 1(a) above}.
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.
Average Markup for General Contractors? Most contractors are looking at a 35% margin; thus, a markup of 54%, or 1.54, is required. Subs typically have a gross profit margin of 50%; hence they require a markup of 100% or 2x.
A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract.
Cost Plus Contract Disadvantages For the buyer, the major disadvantage of this type of contract is the risk for paying much more than expected on materials. The contractor also has less incentive to be efficient since they will profit either way.

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Apr 12, 2020 Contents ; 1 Overview ; 2 Price regulation variant forms ; 3 Rent control vs Rent stabilization ; 4 Vacancy control or decontrol ; 5 Deferred rent

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8. Construction Pricing and Contracting

The construction contract price includes the direct project cost including field Cost plus fixed percentage; Cost plus fixed fee; Cost plus variable fee

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Louisiana Laws - Louisiana State Legislature

Contract types. A. The department shall utilize either cost plus fixed fee with a maximum limitation, cost per unit of work, specific rates of compensation,

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