Cost plus contract
(Redirected page to Cost reimbursable contract) |
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| + | Cost plus contracts are a form of cost reimbursable contract but there is some disagreement in terms of the relationship with prime cost contracts. Whilst JCT suggests prime cost contracts, cost plus contracts and cost reimbursable contracts are the same thing, others consider they differ as cost of works packages (the prime cost) are reimbursed, but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price. | ||
| − | + | There are a number of variations aswell as terms that describe cost plus contracts, which also vary depending on coutry but essentially three types of cost reimbursable methods used in the construction industry. | |
| + | |||
| + | = Cost + Fixed Percentage Contract = | ||
| + | |||
| + | Cost + Fixed Percentage Contract – Contractor will be entitled to Cost and profit percentage as agreed before. | ||
| + | |||
| + | = Cost + Fixed Fee Contract = | ||
| + | |||
| + | Cost + Fixed Fee Contract – Contractor will be entitled to Cost and Fixed fee as a profit | ||
| + | |||
| + | = Cost + Fixed Fee with Guaranteed Maximum Price Contract = | ||
| + | |||
| + | Cost + Fixed Fee with Guaranteed Maximum Price Contract – Contractor will be entitled to Cost and Fixed fee as a profit, But the cost of the project should not exceed the agreed amount | ||
| + | |||
| + | = Cost + Award Fee contract = | ||
| + | |||
| + | = Cost + Incentive fee = | ||
Revision as of 16:29, 10 January 2024
Cost plus contracts are a form of cost reimbursable contract but there is some disagreement in terms of the relationship with prime cost contracts. Whilst JCT suggests prime cost contracts, cost plus contracts and cost reimbursable contracts are the same thing, others consider they differ as cost of works packages (the prime cost) are reimbursed, but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.
There are a number of variations aswell as terms that describe cost plus contracts, which also vary depending on coutry but essentially three types of cost reimbursable methods used in the construction industry.
Contents |
Cost + Fixed Percentage Contract
Cost + Fixed Percentage Contract – Contractor will be entitled to Cost and profit percentage as agreed before.
Cost + Fixed Fee Contract
Cost + Fixed Fee Contract – Contractor will be entitled to Cost and Fixed fee as a profit
Cost + Fixed Fee with Guaranteed Maximum Price Contract
Cost + Fixed Fee with Guaranteed Maximum Price Contract – Contractor will be entitled to Cost and Fixed fee as a profit, But the cost of the project should not exceed the agreed amount
Cost + Award Fee contract
Cost + Incentive fee
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