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| ACTUAL COST PLUS A FEE How It Works: The contractor receives a straight fee. All costs of construction are paid directly by the client at strict invoice cost. The contractor is responsible for directing the work as if he were paying the bills directly and in many cases has the right to choose the more important subcontractors or at the very least give the owner a choice of three (3) acceptable subcontractors for each construction trade. Pros and Cons: - The client selects all subcontractors from a list acceptable to the contractor; - The client assumes all the cost risk; - The contractor assumes none of the cost risk; - The buyer pays all costs directly and any net savings belongs to the client; - Changes are easily made to any allowance item; - This is extremely flexible and allows the client to change the project significantly; - This allows the buyer a much greater hands on position; - This requires measurably more effort from the client. |
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