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Cost Plus contracts
- The most flexible and cost effective way to build your new home! Change what you like, when you like!
- Tiles
- Paints
- Rendering
- Facade
- Kitchen
- And more!
Get MORE info
Our 'COST PLUS' Service
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What is a cost price contract?
Where material and services are purchased throughout the various stages of the building process, and costs are paid by the owners or their financier.
The head contractor make claims at pre-agreed intervals or milestones and could provide supplier or subcontractor invoices to substantiate the cost.
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Fixed price contracts vs cost price contracts – what’s the difference?
Fixed price means the amount to be paid to the contractor is a lump sum in fixed stages. The builder estimates and lists all inclusions and exclusions before start of project, which generally cannot be changed without extra cost. This offers certainty of overall costs to customer unless variations are undertaken and costed by the builder.
Cost Plus contracts on the other hand are not based on a fixed and final list of inclusions and exclusions. While this reduces certainty of a total cost of project, any cost incurred by customer is completely of their own choosing and any payments to third parties are known to all parties.
Cost Plus contracts on the other hand are not based on a fixed and final list of inclusions and exclusions. While this reduces certainty of a total cost of project, any cost incurred by customer is completely of their own choosing and any payments to third parties are known to all parties.
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Benefits of a cost plus contracT
- Its an open- book process allowing the customers to see and approve direct cost for the works
- No incentive or need for the builders to ‘cut costs’
- Allows for more flexibility to owners with the constant monitoring of costs and expenditures, including control of project funds via a joint account
- Allows for bargaining with suppliers and competitive quotations from subcontractors
- Allows the principals to better control time, cost and delivery of the project
- If a finance is required, documents may be provided showing a projected cost and it's progress payments
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Disadvantages of a cost plus contract
- The flexible nature of these contracts encourages excessive changes by some customers, therefore delays to the project
- Owners' usual day jobs may be affected by certain choices due to queries and site visits required
- More administrative 'during' the project in comparisons to fixed-price contracts requiring all administration to be completed before start of projects
- Any purchases made outside of builder's standard suppliers may result in loss of discounts and some orders or deliveries may take extended periods
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- We offer two options under the Cost Plus contract:
- Cost Plus 5% - project management only; site management by a Foreman
- Cost Plus 10% - project management and site management
PROJECT MANAGER AND FOREMAN
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What is a project manager?
Our company (and director) as holder of a Contractor License is the project manager, responsible for compliance with the NCC, contract management, financial management, compliance with safety regulations and development consents by all parties.![]()
What is a Foreman?
A foreman is responsible for ensuring that everything goes smoothly at site on a 'ground level'. They are the daily point of contact and coordinate tasks for the day or week, schedules subcontractors, oversee quality of the site and authorise completions. They also report the progress of the project to the project manager.
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Address
PO Box 3081,
Mt Druitt Village NSW 2770
Our Hours
Monday - Sunday9:00 AM - 9:00 PM