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 Virginia: scope of work, work site, warranty and insurance.
Fairfax Virginia Construction Contract: Cost Plus or Fixed Fee Explained In Fairfax, Virginia, construction projects are commonly governed by two types of contracts: cost plus and fixed fee contracts. These types of contracts determine how the construction project will be paid for and budgeted. 1. Cost Plus Contracts: Cost plus contracts are contracts where the contractor is reimbursed for all the project's eligible costs, such as labor, materials, equipment, and subcontractor fees. In addition to the eligible costs, the contractor receives a predetermined fee or percentage for their services. This fee is often referred to as the "plus" in the cost plus contract. Keywords: Fairfax Virginia, construction contract, cost plus, reimbursed costs, eligible costs, labor, materials, equipment, subcontractor fees, predetermined fee. 2. Fixed Fee Contracts: Fixed fee contracts, also known as lump-sum contracts, are contracts where the contractor receives a predetermined fixed amount for completing the project. Unlike cost plus contracts, the contractor is responsible for managing all costs associated with construction, including labor, materials, and subcontractors. The fixed fee remains constant throughout the project's duration and doesn't change regardless of actual costs incurred. Keywords: Fairfax Virginia, construction contract, fixed fee, lump-sum, predetermined fixed amount, project management, labor, materials, subcontractors. Different Types of Fairfax Virginia Construction Contract Cost Plus or Fixed Fee: 1. Cost Plus with Guaranteed Maximum Price (Cost Plus GMP): Cost Plus GMP contracts are a hybrid of cost plus and fixed fee contracts. They establish a guaranteed maximum price that the client will pay, which includes all eligible costs and the contractor's fee. If the actual cost of the project exceeds the guaranteed maximum price, the contractor bears the additional expense. This type of contract provides a level of cost control while still allowing for flexibility in budgeting. Keywords: Fairfax Virginia, construction contract, cost plus, guaranteed maximum price, eligible costs, contractor's fee, cost control, budgeting. 2. Cost Plus with Incentive Fee: Cost Plus with Incentive Fee contracts incentivize the contractor's performance to complete the project within budget and on time. In addition to the reimbursed eligible costs, the contractor receives an incentive fee if they meet specific project goals, such as early completion, cost savings, or quality benchmarks. This type of contract encourages efficiency and goal-oriented construction practices. Keywords: Fairfax Virginia, construction contract, cost plus, reimbursed costs, eligible costs, incentive fee, performance, project goals, early completion, cost savings, quality benchmarks. By understanding these different types of Fairfax Virginia construction contracts, both clients and contractors can choose the most suitable arrangement for their projects. Whether it's a traditional cost plus contract, a fixed fee contract, or a hybrid version with additional provisions, finding the right contract type will contribute to successful project completion and financial management.
