The Cost Plus Contractor Agreement is essential for Canadian construction and development projects where traditional fixed-price contracts may not be suitable due to uncertain scope, complex requirements, or need for flexibility. This agreement type is commonly used in emergency work, renovation projects, or complex construction where exact costs cannot be determined at the outset. The document establishes the framework for reimbursing actual costs plus a predetermined fee or percentage, typically including detailed cost definitions, markup structures, payment mechanisms, and compliance requirements with federal and provincial regulations. It's particularly relevant in situations requiring transparency in cost calculation and where the scope of work may evolve during project execution. The agreement must comply with provincial construction lien legislation, worker safety regulations, and relevant tax laws while providing clear mechanisms for cost verification and project management.
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1. Parties: Identification of the contractor and client, including full legal names and addresses
2. Background: Context of the agreement, project overview, and basis for engaging the contractor
3. Definitions: Definitions of key terms including 'Cost', 'Fee', 'Services', 'Project', and other relevant terms
4. Scope of Services: Detailed description of the services to be provided by the contractor
5. Cost and Fee Structure: Definition of allowable costs, calculation of the contractor's fee, and markup percentage
6. Payment Terms: Billing procedures, payment schedules, and invoice requirements
7. Contractor's Obligations: Key responsibilities, performance standards, and compliance requirements
8. Client's Obligations: Client responsibilities, including access, information, and approvals
9. Documentation and Reporting: Requirements for cost tracking, progress reports, and record-keeping
10. Insurance and Liability: Insurance requirements and allocation of risks between parties
11. Term and Termination: Duration of agreement and termination provisions
12. Dispute Resolution: Process for resolving disputes, including mediation and arbitration procedures
13. General Provisions: Standard legal provisions including governing law, notices, and assignment
1. Performance Guarantees: Specific performance metrics and associated remedies, used for complex projects
2. Environmental Compliance: Environmental obligations and compliance requirements, needed for projects with environmental impact
3. Safety Requirements: Detailed safety protocols and requirements, essential for high-risk construction work
4. Quality Control: Specific quality standards and inspection procedures, used for specialized construction work
5. Intellectual Property: IP rights and obligations, needed when design or innovative methods are involved
6. Confidentiality: Detailed confidentiality obligations, used when sensitive information is involved
7. Force Majeure: Specific force majeure provisions, important for long-term or high-value projects
8. Bonding Requirements: Performance and payment bond requirements, used for larger construction projects
1. Schedule A - Scope of Work: Detailed description of services, deliverables, and technical specifications
2. Schedule B - Fee Calculation: Detailed breakdown of cost components and fee calculation methodology
3. Schedule C - Rate Sheet: Approved labor rates, equipment rates, and markup percentages
4. Schedule D - Key Personnel: List of key contractor personnel and their roles
5. Schedule E - Project Schedule: Timeline, milestones, and completion dates
6. Schedule F - Required Insurance: Detailed insurance requirements and coverage limits
7. Schedule G - Health and Safety Requirements: Specific health and safety procedures and requirements
8. Appendix 1 - Cost Breakdown Structure: Template for cost reporting and categorization
9. Appendix 2 - Progress Report Template: Standard format for progress reporting
10. Appendix 3 - Change Order Process: Procedures and forms for managing changes to scope or costs
Authors
Relevant legal definitions
Clauses
Relevant Industries
Construction
Engineering
Infrastructure
Commercial Real Estate
Industrial Manufacturing
Energy
Mining
Oil & Gas
Residential Development
Healthcare Facilities
Education Facilities
Transportation
Utilities
Telecommunications
Relevant Teams
Legal
Procurement
Construction
Project Management
Finance
Operations
Risk & Compliance
Commercial
Estimating
Contract Administration
Relevant Roles
Construction Manager
Project Manager
Contract Administrator
Quantity Surveyor
Cost Engineer
Procurement Manager
Legal Counsel
Risk Manager
Commercial Manager
Operations Director
Chief Financial Officer
Construction Site Supervisor
Compliance Officer
Project Control Manager
Estimating Manager
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