Pros and Cons of Cost-Plus vs. Fixed Price Contracts

• Overview
• Agenda
• Faculty
• Credits

Benefits

Lump sum and cost-plus contracts for construction projects offer different protections and incentives for both owners and contractors. With today's economic pressures, it is important that project participants know the factors to consider in choosing between these pricing approaches and to understand the advantages and disadvantages to each.

The current economic situation has imposed great strains on the construction market. Every project and every industry participant has felt the impact. In this environment, it is critical for owners and contractors to understand how the adverse economic climate may impact the legal rights and duties that apply to a construction project.

Learning Objectives:

• You will be able to review factors to consider in choosing between lump sum and cost-plus contracts.
• You will be able to define advantages and disadvantages of lump sum and cost-plus contracts.
• You will be able to describe current economic climate on the legal framework on financing, payments, suspension and termination, bankruptcy and defaults.
• You will be able to define costs vs. rates.