Browse Forums General Discussion 1 Jan 03, 2012 12:09 pm We are about to embark on an extension with a builder who is wanting to enter a cost plus contract. The quotes received on fixed price are around 200K , cost plus around 170 K with the claim that there are savings with this style contract. My readings highlight that this is a low risk option for the builder and any potential blow outs with cost are borne by the principal. Sounds like there is a lot of trust required. I am interested in peoples experience with this style of contract. Has it actually saved $ ??. I am also interested if anyone has needed to terminate this style contract due to project continually above estimates. What where the implications ie costs incurred with such a drastic action? Re: Opinions of Cost Plus Project contract for an extension 2May 28, 2012 8:56 pm quite unusual. bit of a worry Re: Opinions of Cost Plus Project contract for an extension 3May 28, 2012 9:43 pm We are about 3/4 way through our build under a cost plus arrangement with our builder. Yes you will need to place a high level of trust in the builder, but it also goes both ways. Our builder came recommended to us by our planner and a mate that had used our builder as their carpenter on their house build a few years ago. We have built trust with our builder. Cost plus has worked well for us as we get the quotes, consider them and then once we accept we get the bill and receipt afterwards. We have found we know exactly what we are getting. If we want to do work ourselves or have someone do it for us directly - we can. Unlike with the normal building process. We have built twice before with well known building companies under a normal stage progress payment. These builders obviously put in large margins to cover any problems (cost blowouts) that may occur during a build. Only blow outs with a cost plus is if you have not done a fairly accurate costing schedule before you start With cost plus you can change your mind on things and not get penalized with changes to your contract. The biggest part of building no matter which way you go, is getting the right person/company that take pride in their work. Smaller builders seem to be in the best position to offer this. Good luck Re: Opinions of Cost Plus Project contract for an extension 4Jun 04, 2012 7:26 pm As a professional builder I would advise you to avoid cost plus contract however if you must, make sure you can terminate at any time without termination fee. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Opinions of Cost Plus Project contract for an extension 5Jun 06, 2012 9:09 am If you want to know what can go wrong with project management? www.buildingexpert.net.au/blog Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Thank you so much everyone. This all makes a lot of sense. I guess when you talk to a builder who butters up everything to look very polished, you get to start believing… 7 17581 1000000% definitely add insulation. I have in my home and it makes a big difference minimising sound transfer. Insulation is pretty cheap and definitely worth it 2 6191 We are building a house that was planned to be clad in Hardie Linea, our builder has now requested to swap this for BGC Nuline Plus. They look fairly similar and he has… 0 608 |