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.
Sometimes they request you use employees instead of subs, or work on a T&M basis. Clients don’t understand how the construction world works. It’s your job to educate them.
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.
Cost plus contracts and Time & Material contracts cause lawsuits and problems for both the contractor and the homeowner involved.