At Stephen Thomas construction, one of the most important early conversations we have with clients is about choosing the right type of construction contract. Two of the most common and effective structures are cost-plus and fixed-price contracts. Each offers distinct benefits depending on your project’s goals, budget flexibility, and how much certainty or adaptability you’re looking for.
Cost-Plus Contracts: Transparency and Flexibility
With a cost-plus contract, you cover the actual cost of labor, materials, and subcontractors, plus an agreed-upon fee or percentage for our services. This model is ideal when project scope may evolve or when you want a detailed look at where every dollar goes.
Why Clients Choose Cost-Plus:
- Clear visibility: You’ll receive full documentation of all project expenses, giving you insight into where your investment is going.
- Adaptable to change: If design elements shift or new ideas come up during construction, it’s much easier to accommodate those changes without renegotiating the entire contract.
- Faster project starts: We can break ground and move forward even if every last design detail hasn’t been finalized—saving time and keeping momentum.
Fixed-Price Contracts: Predictability and Simplicity
A fixed-price, or lump-sum, contract locks in a total cost for the full scope of work. This approach works best when the design and specifications are complete and unlikely to change.
Why Clients Choose Fixed-Price:
- Budget certainty: You know your total investment from day one, which can be helpful for financial planning or securing funding.
- Streamlined process: With a set scope and price, the contract and billing process are straightforward and efficient.
- Efficiency-driven approach: As your contractor, we’re motivated to deliver on-time and within budget, aligning our performance directly with project success.
Helping You Choose the Right Approach
Ultimately, the best contract model depends on your project’s scope, complexity, and how you prefer to manage time, budget, and flexibility. We’re here to walk you through both options and help you make an informed decision that protects your interests and sets the project up for success. Whether you prioritize cost transparency or fixed investment, we’ll build a contract that aligns with your goals and delivers a great outcome.