Follow Us x
Fixed Price Vs Cost Plus Percentage Vs Fixed Cost Plus
Fixed Price:
Client pays a Fixed dollar amount for the home with a List of 'Standard Features"
- Variance form the standard features will be charged at price determined by the builder which will include his Profit.
- Client make selections from Builder "Standard Features"
- Builder uses his Trades and a Suppliers, variances to this are limited.
- Builder Profit is a Risk of the Builder in guaranteeing the fixed price, thereby Builder needs to build into the fixed price a Safety net dollar amount into his base price.
- Profit is of No Concern to the Client, nor disclosed. o Warranty is covered by the Builder and a Dollar amount is built into his price to cover such future expenses.
- Risk involved by Builder generally results in the Client paying a higher dollar amount for the project.
Cost Plus Percentage
Client pays all invoices at Builder Cost and Builder marks up said item at a percentage to cover his Profit and Overhead.
Client assumes the risk of Cost Overruns
Client Knows Actual Costs as they are solicited and incurred
- Construction Manager will solicit quotes from several vendors and suppliers to seek a qualified quote.
- Construction manager is paid a fee over and above cost for each item.
Contracts are written between the trade / Supplier and the Client.
Client is apprised of a Live Budget and Live Schedule Regularly.
Warranty is Assumed by the client as a dollar amount is Not factored for such future costs
- As a Contract is written by and between each trade, each trade will warrant their work (Construction Manager will administer this. )
Warranty management is arranged through a Third party Warranty administrator to coordinate warranty issues. Client will pay Warranty Administrator.
Cost Plus Fixed Fee
Same as Cost plus Percentage, EXCEPT Construction Mangers' fee is fixed in advance
- Construction Manger does not charge percentage on top of selection items.
- Quoting of Trades and Suppliers is in the best interest of the Client, as Construction Manager is focused on completing the project according to the Client's' wants needs and desires without vision of additional fees for "Extras" or selection items.
