| Money Safety |
- Clients will be making the payments only after they receive the
material to their site and the specific work is compled. So,
here the client's money will be safe with them and they can pay
only when required.
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- Clients will be required to make bulk advance payments upfront,
irrespective of the progress or completion of specific work,
posing a potential risk to their funds without a guarantee of
receiving materials or completed work.
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| Cost saving |
- Cleints will be saving upto 10% of the overall project cost
since the payments will be made directly to the vendors.
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- No option to save as the project cost is Fixed and Clients have
to pay the agreed amount to the contractor.
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| High Quality |
- Contractor prioritize quality over cost-cutting since their
profit isn't directly tied to minimizing expenses, potentially
leading to a higher standard of workmanship and usage of quality
Materials.
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- Here, Contractors prioritize cost-cutting over quality, as their
profit is directly tied to minimizing expenses, potentially
leading to a lower standard of workmanship and usage of subpar
materials
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| Client Satisfaction |
- With the ability to adjust project details as they needed,
Clients are more likely to be satisfied with the final result.
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- Due to the inability to modify project details as required,
Clients may not be satisfied with the final result, as they have
limited flexibility during the construction process.
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| Transparency |
- Cost-plus contracts provide transparent pricing with full client
visibility into project costs, including materials, labor,
contractor fee, and design costs. Detailed cost breakdowns
ensure transparency, allowing informed decisions without
surprises or hidden expenses.
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- Lack of transparency in pricing, as clients may not have full
visibility into the project's costs, including detailed
breakdowns of materials, labor, contractor fees, and design
costs. This limited transparency may lead to uncertainties,
potential surprises, and hidden costs, making it challenging for
clients to make decisions.
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| Flexibility |
- Cost-plus facilitate adjustments and customizations without the
need for extensive negotiation. This is particularly
advantageous for projects requiring customization, as clients
have the flexibility to modify project details, materials, and
features as the project progresses, accommodating their evolving
preferences.
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- Lack of flexibility can be a limitation for projects that
require customization, as clients may face challenges in
modifying project details, materials, and features during the
course of the project, limiting their ability to accommodate
evolving preferences.
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| Control over Project |
- Cost-plus model provides improved project control, empowering
clients with active involvement in decision-making processes for
every aspect of their project. This enhances their ability to
influence and oversee the desired outcomes.
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- Fixed-price models limit client control over project decisions,
restricting their involvement in decision-making processes for
various aspects of their project. This constrains their ability
to influence and oversee outcomes, reducing the level of
empowerment in project.
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| Project Time-line |
- In a cost-plus, projects often experience expedited progress due
to the flexible nature of the contract. With the ability to make
swift decisions and adjustments, clients and contractors
collaborate seamlessly, promoting efficiency and ensuring timely
completion.
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- Projects may encounter slower progress due to the rigid nature
of the agreement. Limited flexibility in decision-making and
adjustments can lead to potential delays, as clients and
contractors face challenges in adapting to changing
circumstances, potentially impacting efficiency and the timely
completion of the project.
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| Value Engineering |
- In cost-plus, contractors are free from the constraints of a
fixed budget, fostering a willingness to propose innovative
ideas. Unlike fixed-price contracts, this approach allows for
greater flexibility and encourages creative solutions. The
absence of budget restrictions enables a more dynamic and open
approach to project execution.
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- In fixed-price contracts, the predetermined budget restricts
contractors from proposing innovative ideas, in contrast to the
flexibility allowed by cost-plus models. The rigidity of fixed
budgets can discourage creative solutions and hinder a dynamic
approach to project execution.
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| Manpower |
- Contractors can strategically allocate skilled manpower,
prioritizing the delivery of high-quality work. This approach
allows for a focus on expertise and professionalism, enhancing
the overall quality of the project.
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- With the constraint of cost minimization, contractors may
struggle to strategically allocate skilled manpower,
compromising the prioritization of high-quality work. This could
impact the overall project quality by limiting the focus on
expertise and professionalism.
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