Cost-Plus Contract Model

The Cost-Plus model is a contract delivery option that allows the Contractor to begin work before the design is fully completed. Under this model, the Contractor is reimbursed for all construction-related expenses, plus an agreed-upon fee, typically lower than a standard General Contractor markup.

Unlike traditional fixed-price contracts, where the General Contractor works off a completed design and applies a markup (usually 15% or more), the Cost-Plus model enables the project to start sooner, even while design work is still in progress—similar to the Construction Management (CM) model. Since the project Owner assumes the responsibility for cost liability, the Contractor’s markup fee is typically lower, allowing for cost savings and an earlier start.

The Cost-Plus model is ideal for Owners who:

• Want the flexibility to select a contractor based on qualifications rather than the lowest bid, ensuring quality and peace of mind.
• Need to start the project sooner but cannot wait for the design to be fully finalized.
• Are facing project complexities that make it difficult to obtain accurate and detailed specifications for the entire project or specific portions.

When the Cost-Plus Model is Useful:

• When the Owner cannot complete the design or obtain accurate pricing before the work begins, often due to time constraints.
• For projects that are too complex for the Owner to provide precise specifications upfront, requiring a flexible pricing structure to manage costs effectively.

For more information or to request a quote for our Cost-Plus services, contact us today.