Cost Plus Construction Contract Template

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Free cost plus construction contract template for managing construction projects, reimbursable expenses, contractor fees, and project terms. Copy, customize, and download instantly.

A cost plus construction contract outlines how a contractor will be reimbursed for project expenses along with an agreed fee or percentage for services. This template is useful for construction companies, property owners, developers, and contractors managing projects where material and labor costs may fluctuate during the course of construction.

When To Use

Use this template when hiring a contractor under a cost plus pricing structure instead of a fixed-price agreement. It is commonly used for renovation projects, custom builds, commercial construction, and projects with evolving scopes or uncertain costs.

Template

COST PLUS CONSTRUCTION CONTRACT

This Cost Plus Construction Contract (“Agreement”) is entered into on [Date] by and between:

Company/Client:
Name: [Company or Client Name]
Address: [Address]

and

Contractor:
Name: [Contractor Name or Business]
Address: [Address]

1. PROJECT DESCRIPTION
The Contractor agrees to perform construction services related to the following project (“Project”):

Project Name: [Project Name]
Project Location: [Project Address or Description]

2. PROJECT TIMELINE
Project Start Date: [Start Date]
Estimated Completion Date: [Completion Date]

The Contractor agrees to complete the Project within a reasonable timeframe, subject to delays caused by weather, material shortages, permitting issues, or approved change orders.

3. SCOPE OF WORK
The Project shall include the following work, features, or requirements:

- [Requested Feature or Service]
- [Requested Feature or Service]
- [Construction Requirement]
- [Project Restriction or Limitation]
- [Project Restriction or Limitation]

Additional project details:
[Insert specifications, drawings, permits, or schedules]

4. COST PLUS PAYMENT STRUCTURE
The Company agrees to reimburse the Contractor for reasonable and documented direct project costs, including but not limited to:

- Labor
- Materials
- Equipment
- Permits and inspection fees
- Engineering or design services
- Taxes and delivery charges
- Subcontractor expenses

The Company also agrees to compensate the Contractor as follows:

[ ] Flat Fee: [$Amount]
[ ] Percentage Fee: [Percentage]% of total project costs

Indirect or overhead expenses covered under this Agreement:
[Describe overhead, administrative costs, insurance, or related expenses]

5. CHANGE ORDERS
Changes to the Project scope, materials, or specifications must be approved in writing.

The Company:
[ ] Will pay for approved change orders
[ ] Will not pay for unauthorized changes requested without written approval

6. DOCUMENTATION OF COSTS
The Contractor agrees to maintain accurate records and supporting documentation for all reimbursable expenses. The Company may review invoices, receipts, payroll records, and related documents upon reasonable request.

7. CONTRACTOR RESPONSIBILITIES
The Contractor agrees to:

- Perform work professionally and safely
- Communicate project updates in a timely manner
- Comply with applicable building codes and regulations
- Maintain appropriate licenses and insurance when required
- Use reasonable care in project management and supervision

8. TERMINATION
Either party may terminate this Agreement upon written notice if the other party materially breaches the terms of the Agreement.

9. SIGNATURES
By signing below, both parties acknowledge and agree to the terms of this Agreement.

Company/Client Signature: ______________________
Printed Name: _________________________________
Date: ________________________________________

Contractor Signature: __________________________
Printed Name: _________________________________
Date: ________________________________________

Example

COST PLUS CONSTRUCTION CONTRACT

Date: March 12, 2026

Company/Client:
Name: Oakridge Property Group

Contractor:
Name: Summit Builders LLC

Project Name:
Lobby and office renovation at Oakridge Plaza.

Project Timeline:
Start Date: April 1, 2026
Completion Date: September 30, 2026

Scope of Work:
- Interior demolition and remodeling
- Electrical and lighting upgrades
- Flooring replacement
- ADA-compliant restroom updates

Compensation Structure:
[X] Percentage Fee: 12% of total documented project costs

Indirect Expenses:
Project supervision, insurance, and administrative overhead.

Change Orders:
All changes must be approved in writing by the client before work begins.

Company Signature: Melissa Grant
Date: March 12, 2026

Contractor Signature: Daniel Brooks
Date: March 12, 2026

Frequently Asked Questions

What is a cost plus construction contract?

It is a construction agreement where the client reimburses project costs and also pays the contractor an additional fee or percentage.

What expenses are usually reimbursed?

Typical reimbursable costs include labor, materials, permits, subcontractors, and equipment expenses.

Why are change orders important?

Written change orders help document modifications to project scope, pricing, and timelines.

Can the contractor charge overhead costs?

Yes, many cost plus agreements include approved overhead or administrative expenses.

Who commonly uses cost plus contracts?

Property owners, developers, contractors, and construction companies frequently use cost plus agreements for flexible or evolving projects.

Cost Plus Construction Contract Template

When To Use

Template

Example

Frequently Asked Questions

What is a cost plus construction contract?

What expenses are usually reimbursed?

Why are change orders important?

Can the contractor charge overhead costs?

Who commonly uses cost plus contracts?

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