Home
Forms Library
Cost plus fixed fee contract advantages and disadvantages

Construction Contract Cost Plus or Fixed Fee - Indiana 2025

cost plus fixed fee contract advantages and disadvantages Preview on Page 1

Show details

4.4 out of 5

23 votes

This document is a Construction Contract between a Contractor and an Owner, outlining the terms and conditions for the construction of a 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 scope of work. The contract also includes provisions for late payments, destruction or damage to the project, assignment rights, and legal interpretations. Additionally, it provides cancellation rights for the Owner under certain circumstances.

Here's how it works

01. Edit your cost plus fixed fee contract advantages and disadvantages online

Type text, add images, blackout confidential details, add comments, highlights and more.

02. Sign it in a few clicks

Draw your signature, type it, upload its image, or use your mobile device as a signature pad.

03. Share your form with others

Send unit price contract pros and cons via email, link, or fax. You can also download it, export it or print it out.

The best way to edit Construction Contract Cost Plus or Fixed Fee - Indiana online

Ease of Setup

DocHub User Ratings on G2

Ease of Use

DocHub User Ratings on G2

With DocHub, making changes to your paperwork requires just a few simple clicks. Make these quick steps to edit the PDF Construction Contract Cost Plus or Fixed Fee - Indiana online free of charge:

Register and log in to your account. Log in to the editor using your credentials or click Create free account to examine the tool’s features.
Add the Construction Contract Cost Plus or Fixed Fee - Indiana for editing. Click on the New Document option above, then drag and drop the sample to the upload area, import it from the cloud, or via a link.
Modify your template. Make any changes required: insert text and pictures to your Construction Contract Cost Plus or Fixed Fee - Indiana, highlight information that matters, remove sections of content and substitute them with new ones, and insert symbols, checkmarks, and fields for filling out.
Complete redacting the template. Save the updated document on your device, export it to the cloud, print it right from the editor, or share it with all the parties involved.

Our editor is very intuitive and effective. Give it a try now!

be ready to get more

Complete this form in 5 minutes or less

Get form

Got questions?

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

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 the difference between a fixed price contract and a cost-plus 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.

Is cost-plus percentage of cost illegal?

Breadcrumb. 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 cost-plus percentage of cost contracts?

Typically, under this contract type, the amount the homeowner will have to pay will be the actual costs incurred by the contractor (e.g. the amount a building contractor pays for materials and to their subcontractors) plus a percentage of those costs, or an added fee, to cover the contractors overheads and profit.

What percentage do contractors charge for cost-plus?

Many Cost-Plus Percentage Builders charge 20%30% for overhead costs. In the example above, if the cabinets come in 5K over budget and the plumbers come in 5K over budget, the client ends up spending an additional 12K the extra 2K being the builders fee.

What are the disadvantages of a cost-plus fee contract?

What are the advantages and 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 the margin on a cost-plus contract?

For cost-plus contracts (where the client agrees to pay all costs, plus a specific percentage margin to the builder), a common practice is costs plus 15 to 20 per cent margin, although there are some contracts which include a margin as small as 5 per cent. The builders margin may also be a fixed amount.

Construction Contract Cost Plus or Fixed Fee - Indiana 2025

Here's how it works