Construction Glossary
Cost-Plus Contract
A contract where the owner pays the contractor for actual costs plus an additional fee or percentage for profit.
What Is Cost-Plus Contract?
A Cost-Plus Contract is a type of construction agreement where the contractor is reimbursed for the actual costs of labor, materials, and overhead, plus an agreed-upon fee or percentage for profit. This arrangement allows for flexibility in project scope and design changes but requires detailed accounting and regular reporting to manage costs
Example
Agreement where costs are reimbursed plus a percentage for profit.