Cost Plus Model
Our main point of difference to traditional builders is our Cost Plus Model, instead of a Lump Sum Model, which is an Open Book collaborative engagement. This model offers Ethical and Transparent project costings and all project costs are shared with the client and all trade packages are competitively tendered to the market to achieve the best Value for Money for our client!
Our clients benefit from this by paying less fees to the Builder, and benefiting from all cost savings achieved via tender negotiations, commercial discounts from suppliers, and we charge no extra fees on any Variations! Clients easily save up to 10% or more compared to Lump Sum engagement!
We offer this model for both Residential & Commercial projects! Contact us to find out more!
When it comes to construction projects, selecting the right contract model is crucial for both clients and builders. The Open-Book (Cost Plus) model is gaining popularity as an ethical and transparent choice compared to the traditional Closed-Book (Lump Sum) model. Here’s why the Open-Book model is a better option for clients, ensuring fairness, quality, and cost-efficiency.
What is the Open-Book (Cost Plus) Model?
In an Open-Book model, all project costs are transparent to the client. The builder charges the actual costs incurred during construction, plus a predetermined fee for their services. This means clients have full visibility into expenses, including materials, labor, and subcontractors.
The Problems with the Closed-Book (Lump Sum) Model
In a Lump Sum contract, the builder provides a fixed price for the entire project. While this may seem appealing initially, it often leads to:
Hidden Costs and Variations: When design documentation is incomplete or changes occur, clients often face expensive variations that significantly increase the final price.
Compromised Quality: To maximize profit, some builders may use cheaper materials, hire less experienced trades, or cut corners in workmanship.
Limited Transparency: Clients rarely see the actual breakdown of costs, leading to mistrust and uncertainty.
Why the Open-Book Model is More Ethical
Transparency in Costs: Clients can see where every dollar is spent, ensuring there are no hidden charges or inflated costs.
Better Quality Control: Since costs are reimbursed, builders are incentivized to use high-quality materials and skilled trades without cutting corners.
Fair Pricing for Variations: Any design changes or unforeseen issues are openly discussed, with clients approving costs before work proceeds.
Collaborative Approach: Clients are involved in decision-making, fostering trust and ensuring the project aligns with their vision and budget.
Flexibility and Fairness: The model allows for adjustments without penalizing the client, unlike Lump Sum contracts where variations can be disproportionately expensive.
The Open-Book (Cost Plus) model offers a transparent, flexible, and ethical approach to construction projects. By choosing this model, clients benefit from cost clarity, superior quality, and a collaborative relationship with their builder. Avoid the pitfalls of Lump Sum contracts and ensure your construction project is completed to the highest standards without hidden costs.