Cian BrennanFounder, Quantum Contract Solutions · Founder

How Cost Plus Construction Contracts Outperform Fixed Price: Essential Insights

Name: How Cost Plus Construction Contracts Outperform Fixed Price: Essential Insights
Uploaded: 2023-08-20T22:00:24+00:00
Duration: 35 s
Channel: Cian Brennan
Description: Cian Dillon Brennan explains when to use cost-plus versus fixed-price construction contracts. Cost-plus works when scope will change, shifting risk to…

20 Aug 2023 · 1 min

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0:35

Cian Dillon Brennan explains when to use cost-plus versus fixed-price construction contracts. Cost-plus works when scope will change, shifting risk to the builder. Fixed-price is better when you know exactly what you want.

Chapters

Cost plus. If you know things are going to change dramatically, then cost plus is quite nice. As in, like, I've agreed the markup essentially, and I know if I'm going to add something, I'm just going to get the base price and it's going to be an add-on, and it's fair and I'm happy with that. But that benefits the builder because he removes the risk from his contract, and you could potentially end up paying more depending on how much changes you make as well. So really, for the end user, the key thing is, do I know what I'm going to do right now? If I do, go with fixed price. If I don't, go with cost plus. That's probably That's the overarching commercial advice, really.