Choosing the Right Contract with Your Concrete Contractor
Hiring a concrete contractor is, without a doubt, one of the initial steps you need to finish in order to build a new building or to expand your home. Hiring concrete contractors for a new driveway, a new basement, building posts, elevated slabs, and others are all a part of the construction process. However, before anything is even started, you will need to settle with the contract. The contract is the agreement that determines how the project will be conducted and how much the agreed budget will be. These are also contracts similarly seen with home builders. Consider both of them below:
Fixed Price Contract
The fixed price contract is exactly what it seems like – this is a contract where right from the very beginning the budget has been set. The contractor will be paid this amount and then they have to work around to ensure that the concrete work fits within that given budget. They have to use materials and fit in their allowances in that given financial restriction. If they go over that then they will have to cover the charges.
The good thing about this type of contract is that you are sure you won’t accidentally spend too much. Commercial buildings could spend millions of dollars in construction so making sure that the concrete work does not shoot over the budget is a life saver. This becomes even more important for residential owners who might have to follow a very strict budget to avoid losing out credit.
The downside is that you are very limited with what you can do, depending on how much the fixed price is. If the fixed price is relatively low then you will have to settle with average materials and standard concrete instead of the higher end, better quality options.
Cost Plus Contract
The cost plus contract, on the other hand, can be considered as the exact opposite. In this type of contract there is no restricted budget (although some will put a high cap that the contractors shouldn’t reach). The contractor will simply buy the materials, conduct the work, and then later liquidate all of the expenses. This is the amount that the client will pay, as well as an added extra which will serve as the profits of the concrete contractors.
This is a great contract if money is not an issue. The concrete contractors have the freedom to create the best concrete work because they do not necessarily have to follow a tight budget ceiling. This means you get better quality work that is more durable, made with the best materials, and you might get some creative flair tossed in as well.
Of course the downside to this contract is that you might end up overspending. You could add a cap or limitation but this is a general limitation and not the restricted budget found in the fixed price. A simple summary is: you can do anything and use any material to get the job done so long as it doesn’t cost over $200,000. That’s a very broad sample but it will give you a good idea of how it all fits in together.