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At KG Builders, we provide custom construction and renovation solutions to help businesses and organizations reach their goals with their building projects. Our team is dedicated to exceptional workmanship and customer service, which is evident in the projects we complete and the relationships we’ve built in over 35 years in the industry.
Fixed cost contracts are based on a complete set of design drawings provided by the owner before the project begins. The scope of work is defined in the design drawings and the cost of the project to the owner is fixed in the contract. Changes in the scope of work are addressed through the change order process and the contract is amended accordingly.
Cost Plus Fee
Cost Plus contracts involve the negotiation of a fee for construction management services which are above and beyond the actual basis of the project. The cost plus fee constitutes labor, materials, subcontractor, professional and job-related soft costs. The contractor bills the owner for the invoiced amount of the cost basis items plus a fee. Theses contracts allow the owner to see all the elemental costs of the project and easily make changes to the scope and overall budget more quickly than in a traditional fixed cost arrangement. Cost plus usually involves the contractor as a constructor.
In a Project Management role, the managing company oversees the administrative portion of the project only. Usually, but not always, the manager is not a constructor. The compensation for the management company is typically a negotiated fee and is fixed before the work starts. Services range from simple owners’ representation to full site supervision. There will sometimes be a general contractor in charge of the overall jobsite logistics, depending on the size of the project.
In a Design Build arrangement, the contract can be structured in any form the suites the project requirements. Design build contracts involve the contractor in the planning stage of the project. Based on the requirements of the owner, the contractor works with the design professionals to deliver the project scope and design and then moves directly to the construction phase of the project. Design build projects are particularly suited for owners who what to keep costs under control by having the contractor involved in the design process. It is also advantageous if the project has time constraints and the full scope of the work has not been defined before construction needs to begin.
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