What is a cost plus fixed fee contract and what are its advantages and disadvantages?
A hybrid of a cost plus and fixed fee contract is cost plus a fixed fee. In this scenario the builder establishes his fee based on the expected costs and fixes that amount. If the costs of the base project go up or down, the building fee remains the same. The fee does not vary except through written change orders. This scenario allows the builder and owner to work together to control the costs and provides the proper incentives to do so.
