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 Washington: scope of work, work site, warranty and insurance.
Bellevue, Washington Construction Contract: Cost Plus or Fixed Fee In Bellevue, Washington, construction contracts can be either cost plus contracts or fixed fee contracts. Both contract types are commonly used in the construction industry and have distinct characteristics and features. Let's delve into each type in detail: 1. Cost Plus Construction Contract: A cost plus construction contract is an agreement whereby the contractor is paid for the actual cost incurred in completing the project, along with an additional fee or percentage as profit. This contract type provides transparency and flexibility for both the contractor and the client. The following are some key aspects of a cost plus construction contract: a. Actual Cost: Under this contract, the contractor is reimbursed for the direct expenses incurred during the construction process. These expenses typically include labor wages, materials, equipment rentals, permits, and subcontractor costs. All expenses are thoroughly documented, and the client has access to these records for transparency. b. Fee Structure: In addition to the actual cost, the contractor is entitled to a fee or percentage for their services. This fee covers overhead costs, project management, and the contractor's profit. The specific fee structure is usually negotiated and outlined in the contract. c. Change Orders: In cost plus contracts, change orders are relatively common since they allow modifications to the project scope or design during construction. The changes are documented, and any added costs associated with these change orders are discussed and approved by both parties. 2. Fixed Fee Construction Contract: A fixed fee construction contract, also referred to as a lump-sum or fixed-price contract, is an agreement where the contractor agrees to complete the project for a predetermined fixed price. This contract type provides a predictable cost structure and places more responsibility on the contractor for managing expenses. The following are key aspects of a fixed fee construction contract: a. Fixed Price: The contractor and client agree upon a fixed price for the entire project before construction begins. This price takes into account the estimated cost of labor, materials, equipment, profit, and any overhead expenses. Once agreed upon, the price remains unchanged irrespective of any unforeseen circumstances or cost fluctuations. b. Detailed Scope of Work: The contract includes a detailed scope of work, which outlines precisely what work is included in the fixed price. Any deviation from this scope may result in additional costs, change orders, or adjustments to the contract. c. Risk Allocation: In fixed fee contracts, the contractor generally assumes more risk since any unforeseen expenses or delays that arise during construction are usually their responsibility. Therefore, contractors often take measures to thoroughly assess the project's requirements and potential risks before committing to a fixed fee contract. When it comes to Bellevue, Washington construction contracts, both cost plus and fixed fee contracts are commonly utilized. However, it's crucial to note that specific terms and variations may exist within each contract type depending on the project, contractor, and client's needs. It's advisable to consult an experienced construction attorney or professional to draft, review, or negotiate a construction contract tailored to your specific requirements.Bellevue, Washington Construction Contract: Cost Plus or Fixed Fee In Bellevue, Washington, construction contracts can be either cost plus contracts or fixed fee contracts. Both contract types are commonly used in the construction industry and have distinct characteristics and features. Let's delve into each type in detail: 1. Cost Plus Construction Contract: A cost plus construction contract is an agreement whereby the contractor is paid for the actual cost incurred in completing the project, along with an additional fee or percentage as profit. This contract type provides transparency and flexibility for both the contractor and the client. The following are some key aspects of a cost plus construction contract: a. Actual Cost: Under this contract, the contractor is reimbursed for the direct expenses incurred during the construction process. These expenses typically include labor wages, materials, equipment rentals, permits, and subcontractor costs. All expenses are thoroughly documented, and the client has access to these records for transparency. b. Fee Structure: In addition to the actual cost, the contractor is entitled to a fee or percentage for their services. This fee covers overhead costs, project management, and the contractor's profit. The specific fee structure is usually negotiated and outlined in the contract. c. Change Orders: In cost plus contracts, change orders are relatively common since they allow modifications to the project scope or design during construction. The changes are documented, and any added costs associated with these change orders are discussed and approved by both parties. 2. Fixed Fee Construction Contract: A fixed fee construction contract, also referred to as a lump-sum or fixed-price contract, is an agreement where the contractor agrees to complete the project for a predetermined fixed price. This contract type provides a predictable cost structure and places more responsibility on the contractor for managing expenses. The following are key aspects of a fixed fee construction contract: a. Fixed Price: The contractor and client agree upon a fixed price for the entire project before construction begins. This price takes into account the estimated cost of labor, materials, equipment, profit, and any overhead expenses. Once agreed upon, the price remains unchanged irrespective of any unforeseen circumstances or cost fluctuations. b. Detailed Scope of Work: The contract includes a detailed scope of work, which outlines precisely what work is included in the fixed price. Any deviation from this scope may result in additional costs, change orders, or adjustments to the contract. c. Risk Allocation: In fixed fee contracts, the contractor generally assumes more risk since any unforeseen expenses or delays that arise during construction are usually their responsibility. Therefore, contractors often take measures to thoroughly assess the project's requirements and potential risks before committing to a fixed fee contract. When it comes to Bellevue, Washington construction contracts, both cost plus and fixed fee contracts are commonly utilized. However, it's crucial to note that specific terms and variations may exist within each contract type depending on the project, contractor, and client's needs. It's advisable to consult an experienced construction attorney or professional to draft, review, or negotiate a construction contract tailored to your specific requirements.
