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 California: scope of work, work site, warranty and insurance.
Chico California Construction Home Improvement Contract Cost Plus or Fixed Fee
Category:
State:
California
City:
Chico
Control #:
CA-00462
Format:
Word;
Rich Text
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Description
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How to fill out California Construction Home Improvement Contract Cost Plus Or Fixed Fee?
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FAQ
Budget: A fixed-price contract is just that: fixed. The agreed-on price at the beginning of the project is the price at the end. Conversely, a cost-plus contract estimates a project's costs but doesn't set the final price until the project is completed.
The contract should describe, in detail, the products to be used and how the work will be performed, i.e., size, color, who will be doing what work, amounts of materials provided, manufacturer model number, etc. There must be a detailed, written payment schedule in the contract.
What Are the Differences Among Fixed Price and Cost Reimbursement Agreements? Fixed price (FP) agreements have fixed payments based on a milestone payment schedule or the submission of deliverables. Cost reimbursement (CR) agreements are paid as costs are incurred and invoiced, typically monthly or quarterly.
fixedprice contract provides for a price that is not subject to any adjustment on the basis of the contractor's cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss.
Disadvantages of cost-plus fixed-fee contracts may include: The final, overall cost may not be very clear at the beginning of negotiations. May require additional administration or oversight of the project to ensure that the contractor is factoring in the various cost factors.
price contract is a contract where the agreedupon price for the job is unchanged throughout the project. It doesn't matter if more time, materials or labor must be used than first estimated, the price stays the same. It's one of the more straightforward construction contracts.
Cost Plus Contract Advantages Higher quality since the contractor has incentive to use the best labor and materials. Less chance of having the project overbid. Often less expensive than a fixed-price contract since contractors don't need to charge a higher price to cover the risk of a higher materials cost than
Unlike a fixed-cost construction contract, a cost-plus construction agreement is a contract in which the owner pays the contractor the actual costs of the materials and labor plus an additional negotiated fee or percentage over that amount.
plusfixedfee contract is a costreimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract.