What prevents a cost-plus contract from going over budget?
The key to keeping a cost-plus contract within an estimate is the Bill of Quantities (BOQ). A BOQ is a very detailed list of the items required to build the proposed structure including materials, labor, and administrative costs. This document is prepared by our experienced AutoCAD technician, and incorporates window types, flooring, hard surfaces, cabinetry and other features that are likely to be known before construction starts. We take this list and material costs and increase them by a reasonable factor to allow for price increases and/or additional materials needed during the course of construction. We include allowances for estimated costs of items including lighting fixtures and fans, bathroom fixtures as well as other features that are unknown at the initial stages of construction. At the end of the project it is quite possible that your final cost will be less than what we have estimated in the Bill of Quantities! What are the “administrative costs” you refer to? One way we c
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- What prevents a cost-plus contract from going over budget?
