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Cost plus construction contract example

Cost plus construction contract template 2026

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This document is a Construction Contract between a Contractor and an Owner, outlining the terms for the construction of a project. It details the scope of work, work site, timelines for completion, permit responsibilities, insurance requirements, and conditions regarding changes to the scope of work. The contract also addresses payment terms, late payment penalties, destruction and damage clauses, assignment restrictions, and warranty limitations. Additionally, it includes provisions for cancellation rights and emergency work authorization.

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Click ‘Get Form’ to open the cost plus construction contract template in the editor.
Begin by filling in the Contractor and Owner details, including names and addresses, in the designated fields at the top of the form.
In the 'SCOPE OF WORK' section, clearly describe the project specifications and materials required. Ensure this aligns with any attached drawings.
Specify the 'WORK SITE' address where the project will take place. This is crucial for legal clarity.
Fill in the 'TIME OF START AND COMPLETION' dates to establish a timeline for project execution.
Complete the 'CONTRACT PRICE' section by selecting either 'COST PLUS' or 'FIXED FEE', and inputting relevant amounts as necessary.
Review all sections for accuracy before signing. Utilize our platform’s features to save your progress or share it with stakeholders for feedback.

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What are the disadvantages of a cost-plus 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.

What is a construction cost-plus contract?

A cost-plus contract is a construction agreement that requires reimbursement for project costs as well as a markup that covers the contractors overhead and profit. In other words, the name is a short-hand way of remembering what the contract covers: project costs plus contractor markup.

What should be in a cost-plus contract?

With a cost-plus contract, the contractor and client first agree on what counts as costs and how profit will be calculated. Costs: Costs might include only direct costs, such as labor and materials, or they might include additional indirect costs, such as overhead expenses.

What percentage do contractors charge for cost-plus?

Example of a cost-plus clause The Buyer agrees to pay the Seller for the cost of materials and labor used in the project, plus an additional 15% markup to cover overhead and profit. The total amount shall be invoiced monthly, and payment will be due within 30 days of receipt of the invoice.

How to structure a cost-plus 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.

cost plus construction contract template

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Why would you use a cost-plus contract?

A cost-plus contract reimburses contractors for project costs plus either a percentage or fixed fee, which they take as profit. This type of contract is favored by contractors because of the flexibility they offer. This makes them ideal for projects where the scope is unclear and subject to change.