what is cost plus in construction?
A cost-plus contract is a type of construction contract in which the contractor is reimbursed for all of the costs associated with a project, plus a fee to account for the contractor's overhead and profit. The fee is typically a percentage of the project costs, but it can also be a fixed fee. Cost-plus contracts are often used when the scope of the project is not well-defined or when there is a high degree of uncertainty about the costs. This type of contract can also be used when the owner wants to ensure that the contractor is not taking on too much risk. The main advantage of a cost-plus contract is that it provides the contractor with a guaranteed level of profit. This can be attractive to contractors, especially when the project is complex or risky. However, cost-plus contracts can also be more expensive for the owner, as they do not have a fixed price. Here are some of the key considerations when using a cost-plus contract: The scope of the project must be well-defined. The