Michael Stone from Markup and Profit writes on contractors being told by clients that they want to work on a Cost Plus basis. This makes building owners think that they will have more control over the total cost of a job, when realistically you can’t know that until the job is completed.

On a Cost Plus contract, almost always, the job grows and ends up costing more than it would have in the first place. It might grow because the client adds to the project. Or it might grow because the job takes longer to build than it should. The result is a project that costs more than the initial estimate. By the time the building owner learns what the final cost will be, it's too late and the bill is due.

Stone recommends that contractors talk their clients out of wanting to work on a Cost Plus basis as it tends to generate more lawsuits or arbitration that those who are on a fixed-price contract. It generates bad blood between the homeowner and the contractor .

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