The Cost Plus Construction Agreement is designed for construction projects in the United States where traditional fixed-price contracts may not be suitable due to project complexity or uncertainty. This agreement type provides flexibility by allowing the contractor to be reimbursed for actual costs while earning a predetermined fee or percentage markup. It's particularly valuable for complex projects, renovations, or situations requiring fast-tracking where complete specifications aren't available at project start. The document must comply with both federal construction regulations and state-specific requirements, including licensing, insurance, and lien laws. It typically includes detailed cost tracking mechanisms, audit rights, and project management procedures to ensure transparency and control.
Cost Plus Construction Agreement for the United States
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Key Requirements PROMPT example:
Cost Plus Construction Agreement
"I need a Cost Plus Construction Agreement for a new hospital development project starting in March 2025, with specific provisions for medical facility compliance and phased completion across multiple buildings, including a 12% contractor fee."
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1. Parties: Identification and details of the Owner and Contractor
2. Background: Context of the agreement and basic project information
3. Definitions: Key terms used throughout the agreement
4. Scope of Work: Detailed description of construction services to be provided
5. Cost Plus Fee Structure: Definition of costs and calculation of contractor's fee
6. Payment Terms: Payment schedule, invoicing requirements, and payment procedures
7. Project Timeline: Construction schedule, milestones, and completion dates
8. Changes and Change Orders: Procedures for modifications to scope, cost, or timeline
9. Insurance and Indemnification: Required insurance coverage and indemnification obligations
10. Termination: Conditions and procedures for contract termination
1. Performance Bonds: Bond requirements for larger projects or when required by law
2. Liquidated Damages: Predetermined damages for delay or non-performance when specific completion dates are critical
3. Dispute Resolution: Mediation and arbitration procedures when parties prefer alternative dispute resolution
4. Environmental Compliance: Specific environmental requirements for projects with significant environmental impact
1. Schedule A - Project Specifications: Detailed technical specifications and drawings
2. Schedule B - Cost Schedule: Breakdown of allowable costs and markup calculations
3. Schedule C - Project Timeline: Detailed construction schedule and milestones
4. Schedule D - Insurance Requirements: Specific insurance coverage requirements and limits
5. Schedule E - Key Personnel: List of key project personnel and their roles
6. Schedule F - Forms and Procedures: Standard forms for change orders, progress payments, etc.
7. Schedule G - Subcontractor Requirements: Requirements and procedures for subcontractor engagement
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