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  • CBF Contracting, Inc.

    13844 Route 68
    Sligo, PA 16255

Is money no object when it comes to your next commercial construction project? Not many can honestly make that claim. The vast majority of people have a budget, which means they need to determine how much a project will cost. The best way to find out the commercial construction cost for your project is to request proposals from contractors, but not all proposals are the same. In fact, there are two distinct types of proposals: fixed price and cost plus.

What are Fixed Price Proposals?
Fixed price proposals are submitted to determine commercial construction cost and are referred to as a construction bid or a lump sum proposal. A fixed price proposal promises that a certain amount of work will be completed for a set price. The contractor estimates how much labor and materials will cost and agrees to complete the job for this price regardless of the actual cost. With this type of proposal, you know exactly what the total cost of the project will be before any work begins.

What are the PROS and CONS of Fixed Price?
A fixed price contract offers plenty of positives and the negatives are more of a buyer beware scenario. If you choose a reputable general contractor, the CONS are minimized.

  • PRO – You know the exact commercial construction cost. Any cost overruns are the contractor’s problem, which offers an excellent incentive for accuracy in the bidding process.
  • PRO – The contract’s focus on the project as a whole delivers an accessible overview that can help you avoid getting bogged down in the details.
  • CON – (not really) Estimating commercial construction cost is something of an art, and most contractors give themselves a little wiggle room to allow for the unexpected. While this means you might pay slightly more than market value for certain things, you will not face additional costs unless you agree to alter the original contract by approving a change order.
  • CON – There’s also a risk that an unscrupulous builder might substitute inferior workmanship or materials to pad their profit, but it’s easy to protect yourself. You simply need to select a reputable contractor who takes pride in providing quality and check that your contract includes the proper level of detail. Here are a few tips when hiring a general contractor.

What are Cost Plus Proposals?
Sometimes called estimates or time and materials proposals, cost plus proposals provide a line item accounting of every facet of a project. This can include everything from labor and materials to insurance and the job site porta potty. What makes it different from a fixed price bid? With a cost plus contract, you do not simply pay an agreed-upon price. Instead, you are billed for the actual cost of the construction.

What are the PROS and CONS of Cost Plus?

  • PRO – You will pay market value, and the level of detail in the contract can make it easy to compare the recommendations and pricing for a particular area of the project across multiple estimates.
  • CON – All that detail can be confusing.
  • CON – Paying market value comes at a price; cost plus contracts do not have a firm ceiling for expenses. Cost overruns are not uncommon, and they are not your contractor’s problem. They’re yours. The only way to protect yourself is to be diligent about monitoring what’s happening with your project.

CBF Contracting Inc. is committed to providing excellent service and workmanship on every job. As a trusted leader in the commercial construction industry, we work hard to take the worry out of your commercial construction project, which is why we choose to offer fixed price contracts. Contact us today to learn more about our commercial construction services and discuss the particulars of your next project with one of our experienced team members.

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