As most builders understand it,
cost-plus construction is a recipe for
disaster. How can you sell a job,
they ask, without putting a limit on
the total cost? And why would anyone
in a competitive business like
construction want to come right
out and tell his clients what his
materials really cost and how much
he really pays employees?
In my 20 years as a builder, I used
cost-plus contracts for about half my
work, and I'll admit that it's more
complicated than working with a
fixed price. After all, a fixed price
contract rewards you with large profits
if you buy right and perform efficiently,
and the owner isn't looking
over your shoulder every step of the
way.