What is Cost-Plus Contract?
Quick answer
A cost-plus contract bills you for actual labor and materials plus an agreed-upon contractor fee or percentage markup.
A cost-plus contract bills you for actual labor and materials plus an agreed-upon contractor fee or percentage markup. It shifts cost overrun risk from the contractor to the owner.
Examples
- Cost plus 15% on a custom home build.
- Cost plus a fixed $25,000 contractor fee.
- Cost plus a guaranteed maximum price (GMP) cap.
Why this matters
Is My Quote Fair? checks whether a cost-plus quote has a GMP cap — without one, your final bill is unbounded.
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Frequently asked questions
What is Cost-Plus Contract?
A cost-plus contract bills you for actual labor and materials plus an agreed-upon contractor fee or percentage markup. It shifts cost overrun risk from the contractor to the owner.
When does Cost-Plus Contract matter?
Is My Quote Fair? checks whether a cost-plus quote has a GMP cap — without one, your final bill is unbounded.
What's an example of Cost-Plus Contract?
Cost plus 15% on a custom home build. Cost plus a fixed $25,000 contractor fee. Cost plus a guaranteed maximum price (GMP) cap.
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