Cost plus a fixed fee contract Sample Clauses

Cost plus a fixed fee contract. In this system a fixed fee is given as contractor’s profit irrespective of the total cost of work. This is to control the tendency of the contractor to increase the cost of the project unnecessarily. • Smaller the completion time more is the profit and hence the contractors hurry to complete the work and the quality of workmanship is not maintained. • This system is not generally used. Advantages: Disadvantages: • Fee amount is fixed • Expensive materials and regardless of fluctuation. price construction techniques may be used to expedite construction. • Provides incentive to contractor to save money & complete the project quickly. • Contractor must absorb any amount over the GMP. • Plans & specifications need to