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Cost-plus contracts: taking a different approach to construction 8 February 2021: Appetite for a different approach to construction projects is growing, particularly around complex contracts, says Darren Ward, managing partner at specialist firm The Orange Partnership.
Across the construction sector, fixed-price contracts dominate the landscape – industry estimates suggest around 60% of building projects are run this way. Clients like them because, in the absence of scope-creep, you know up-front what the project is going to cost. Once the price is agreed, the financial risk is very much carried by the contractor. On the flip side, the client never truly knows how much profit the builder is making.