This is a traditional pricing model where the contractor agrees to complete the project for a fixed sum of money. Any cost overruns or savings are typically borne by the contractor.
In this model, the client pays the contractor for the actual costs of construction plus an additional fee, often stated as a percentage of the total cost. This type of contract provides more transparency regarding..
This pricing plan involves paying the contractor based on the time spent on the project and the materials used, plus an additional fee for profit and overhead. It offers flexibility but may lack cost certainty for the client.
This model involves pricing based on a specific unit of measurement, such as cost per square foot or cost per unit (e.g., cost per apartment in a residential complex). Unit pricing provides clarity on costs but may be less accurate for complex projects.
In a GMP contract, the contractor agrees to complete the project within a set maximum price. If the actual costs exceed this amount, the contractor typically covers the overage. However, if costs are lower than the maximum, the savings may be shared between the client and the contractor.
In design-build contracts, a single entity is responsible for both the design and construction of the project. Pricing may be determined through any of the above methods, with the added benefit of streamlining communication and project management.