This form is a Construction Contract that may be executed with either a cost plus or fixed fee payment arrangement. The form contains the following additional subject matters and complies with the laws of the State of Texas: scope of work, work site, warranty and insurance.
Arlington, Texas Construction Contract: Cost Plus or Fixed Fee When it comes to construction contracts in Arlington, Texas, there are two common types that prevail — Cost Plus and Fixed Fee contracts. These contracts specify the terms and conditions under which a construction project will be executed, including the financial arrangement between the parties involved. Let's take a closer look at each type: 1. Cost Plus Contract: A Cost Plus contract, also known as a cost reimbursement contract, is primarily focused on covering the actual costs incurred during the construction process while providing a fair profit to the contractor. Under this arrangement, the contractor is entitled to reimbursement for the materials, labor, equipment, and overhead costs incurred during the project. Additionally, a predetermined percentage or fee is added to cover the contractor's profit margin. For instance, in a cost-plus contract, the general contractor will provide transparent records of all expenses, including invoices and receipts, to the client. This allows the client to accurately track and verify the costs incurred and ensures transparency throughout the project. However, the client should be aware that unforeseen expenses or changes to the project scope may impact the overall cost. 2. Fixed Fee Contract: Unlike the Cost Plus contract, a Fixed Fee contract involves establishing a predetermined, fixed price for the construction project. This means that the contractor takes on the responsibility of covering all project-related costs, including labor, materials, equipment, and other expenses within the agreed upon price. The contractor's profit is already built into this fixed cost, so any unexpected expenses or changes to the project scope are typically the contractor's responsibility. In a Fixed Fee contract, it is imperative for both parties to accurately assess the project's scope and requirements. This ensures that the agreed-upon fixed price is fair and realistic. While clients benefit from predetermined costs, they need to remain cautious about hidden expenses, demand a clear scope of work, and ensure proper contracts are in place to protect their interests. In summary, the Arlington, Texas construction industry offers both Cost Plus and Fixed Fee contracts. The choice between these contract types largely depends on the client's preferences, risk tolerance, and level of involvement in the project. It is essential for both parties to thoroughly understand the terms and conditions outlined within the contract to ensure a successful construction project.Arlington, Texas Construction Contract: Cost Plus or Fixed Fee When it comes to construction contracts in Arlington, Texas, there are two common types that prevail — Cost Plus and Fixed Fee contracts. These contracts specify the terms and conditions under which a construction project will be executed, including the financial arrangement between the parties involved. Let's take a closer look at each type: 1. Cost Plus Contract: A Cost Plus contract, also known as a cost reimbursement contract, is primarily focused on covering the actual costs incurred during the construction process while providing a fair profit to the contractor. Under this arrangement, the contractor is entitled to reimbursement for the materials, labor, equipment, and overhead costs incurred during the project. Additionally, a predetermined percentage or fee is added to cover the contractor's profit margin. For instance, in a cost-plus contract, the general contractor will provide transparent records of all expenses, including invoices and receipts, to the client. This allows the client to accurately track and verify the costs incurred and ensures transparency throughout the project. However, the client should be aware that unforeseen expenses or changes to the project scope may impact the overall cost. 2. Fixed Fee Contract: Unlike the Cost Plus contract, a Fixed Fee contract involves establishing a predetermined, fixed price for the construction project. This means that the contractor takes on the responsibility of covering all project-related costs, including labor, materials, equipment, and other expenses within the agreed upon price. The contractor's profit is already built into this fixed cost, so any unexpected expenses or changes to the project scope are typically the contractor's responsibility. In a Fixed Fee contract, it is imperative for both parties to accurately assess the project's scope and requirements. This ensures that the agreed-upon fixed price is fair and realistic. While clients benefit from predetermined costs, they need to remain cautious about hidden expenses, demand a clear scope of work, and ensure proper contracts are in place to protect their interests. In summary, the Arlington, Texas construction industry offers both Cost Plus and Fixed Fee contracts. The choice between these contract types largely depends on the client's preferences, risk tolerance, and level of involvement in the project. It is essential for both parties to thoroughly understand the terms and conditions outlined within the contract to ensure a successful construction project.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
