Why cost plus and time & material contracts should be avoided, for both contractors and building owners.
Time and Material contracts are full of risk, especially on larger jobs.
A contractor asked for my opinion on a request he recently received. It’s not a win-win proposition.
Many building owners want a Cost Plus contract because they believe they’ll have more control over the total cost of the project. It’s your job to educate them on the downside.
Why would a developer ask for a cost plus quote to replace a fixed price quote? Because he wants the very same work done at a lower price.
If you are going to deviate from a standard fixed price contract, look at your approach from your client’s point of view. Make sure they know what to expect and what you’ll do.
Don’t take any job where the client tells you how much you can charge for your work.
A very nice gentleman called me last Friday. He related a story about his home remodeling project. It was done a Cost Plus job, the "plus" was negotiated at 18%.