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 Colorado: scope of work, work site, warranty and insurance.
Centennial Colorado Construction Contract Cost Plus or Fixed Fee: Explained in Detail When it comes to construction projects in Centennial, Colorado, two common types of contracts are often used — Cost Plus and Fixed Fee contracts. These contracts play a crucial role in defining the financial aspect of a construction project. Let's delve into the details of each type: 1. Cost Plus Contract: A Cost Plus contract is a popular choice in the construction industry. It involves the payment of the actual cost incurred during the project, along with a predetermined percentage or fee for profit. This contract provides transparency by allowing the owner to see all the expenses associated with the construction process. The Cost Plus contract is further categorized into two sub-types: a) Cost Plus Fixed Percentage (CFP): In this type of contract, the contractor's fee is expressed as a fixed percentage of the total cost incurred. For example, if the fixed percentage is 10% and the total cost is $100,000, the contractor's fee would amount to $10,000. This setup encourages contractors to control costs to ensure their profits remain within the set percentage. b) Cost Plus Guaranteed Maximum Price (CPG MP): Under this type of contract, the owner and contractor agree upon a maximum price limit. The contractor is then responsible for completing the project within the agreed-upon cost, and any savings realized during the construction process are shared between the owner and contractor. However, if the actual cost exceeds the agreed-upon maximum price, the contractor bears the additional expense. 2. Fixed Fee Contract: Unlike the Cost Plus contract, the Fixed Fee contract sets a predetermined lump sum amount that the owner pays the contractor for completing the project. This lump sum covers the contractor's profit, overhead costs, and any anticipated risks. The Fixed Fee contract does not consider the actual costs incurred during the construction phase, making it a suitable choice for owners who desire a fixed budget. It's important to note that the Fixed Fee contract typically requires the contractor to provide a detailed estimate of the project's cost before signing the contract. This estimate serves as a baseline for both parties to ensure the project stays within budget and facilitates better financial planning. In conclusion, Centennial, Colorado Construction Contract Cost Plus or Fixed Fee contracts form the foundation of financial agreements between owners and contractors. By understanding the differences between the Cost Plus and Fixed Fee contracts, parties involved can choose the contract that best suits their needs and expectations.Centennial Colorado Construction Contract Cost Plus or Fixed Fee: Explained in Detail When it comes to construction projects in Centennial, Colorado, two common types of contracts are often used — Cost Plus and Fixed Fee contracts. These contracts play a crucial role in defining the financial aspect of a construction project. Let's delve into the details of each type: 1. Cost Plus Contract: A Cost Plus contract is a popular choice in the construction industry. It involves the payment of the actual cost incurred during the project, along with a predetermined percentage or fee for profit. This contract provides transparency by allowing the owner to see all the expenses associated with the construction process. The Cost Plus contract is further categorized into two sub-types: a) Cost Plus Fixed Percentage (CFP): In this type of contract, the contractor's fee is expressed as a fixed percentage of the total cost incurred. For example, if the fixed percentage is 10% and the total cost is $100,000, the contractor's fee would amount to $10,000. This setup encourages contractors to control costs to ensure their profits remain within the set percentage. b) Cost Plus Guaranteed Maximum Price (CPG MP): Under this type of contract, the owner and contractor agree upon a maximum price limit. The contractor is then responsible for completing the project within the agreed-upon cost, and any savings realized during the construction process are shared between the owner and contractor. However, if the actual cost exceeds the agreed-upon maximum price, the contractor bears the additional expense. 2. Fixed Fee Contract: Unlike the Cost Plus contract, the Fixed Fee contract sets a predetermined lump sum amount that the owner pays the contractor for completing the project. This lump sum covers the contractor's profit, overhead costs, and any anticipated risks. The Fixed Fee contract does not consider the actual costs incurred during the construction phase, making it a suitable choice for owners who desire a fixed budget. It's important to note that the Fixed Fee contract typically requires the contractor to provide a detailed estimate of the project's cost before signing the contract. This estimate serves as a baseline for both parties to ensure the project stays within budget and facilitates better financial planning. In conclusion, Centennial, Colorado Construction Contract Cost Plus or Fixed Fee contracts form the foundation of financial agreements between owners and contractors. By understanding the differences between the Cost Plus and Fixed Fee contracts, parties involved can choose the contract that best suits their needs and expectations.
