Having just read our agreement form, a client asked:
“I’m not really understanding this but honestly, I’m not sure I care how the costs are split up so much as the total cost. I’m assuming this 15% is an industry standard-ish fee? “
Me - Yes, our cost-plus percentage means you are invoiced for work performed, deposits due, plus a contractor fee. We typically invoice every two weeks for the bills and time received, plus the contractor fee, plus GST. By invoicing in this manner, we assert that the invoice is for costs necessarily and reasonably incurred in execution of the contract.
In terms of the overall total cost, when the drawings have been approved by you, we invite subcontractors to provide quotes for their portion of the work. We put all these costs together in an estimate so you can see the total estimated cost. In reviewing the estimate with you, we discuss areas where costs might increase and also where possible cost reductions might be had. Once you approve and give go ahead, we carry out the work, keeping you apprised of progress and costs.