Cost Plus or Open Book Construction | Services| Timcon Construction Ltd

By: Timcon  09-12-2011

A cost plus arrangement is very similar to the traditional fixed price method with the exception that the fee and reimbursable expenses are negotiated between Timcon Construction and the owner.

Once the drawings are completed the project is tendered to the trade contractors and suppliers. The worked is commenced. The contractor provides an "open book" for all project costs and is more accountable to the owner in terms of method of construction , cost substantiation and control of the work and trades. In return the owner takes full risk regarding the final cost of the project. Cost plus or open book arrangements are most often used where the full scope of the work is unclear due to possible concealed conditions such as renovation projects, difficult site or subsurface conditions and other types of unknown or undefined scope of work.

Advantages

  • Owner only pays for work required
  • Savings accrue to owner
  • Allows earlier start and shorter overall project duration

Disadvantages

  • Owner bears risk of overall project costs


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Fixed Price Tendering | Services| Timcon Construction Ltd

The bid is then reviewed by the owner and the consultants who in turn recommend the contact award.The owner and Timcon Construction enter into a stipulated price contract then construction begins. The owner engages the services of Architectural and Engineering Consultants toprepare a set of working drawings and specifications. The successful contractor will typically be the one with the lowest lump sum or fixed price bid.


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This allows us to not only stay on top of the construction, but to anticipate and plan for any potential challenges that could face the project. Throughout the course of the project, computer updates for schedules and costing are completed on a monthly basis. The scope of the work, project schedule and budget are all established with the client. Once the deliverables are mapped out.


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Services| Timcon Construction Ltd. | Red Deer, Alberta

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