We are renovating a townhouse in Washington DC for six-figures-plus and have settled on a contractor whose work we really like. We used an architect, a budget and got a preliminary estimate from the builder that was in line with our expectations. I have a couple of questions about his cost-plus contract, however.
1. $20,000 up front for labor/materials that comes out of the back end when the project is done. (I assume this is so he doesn't have to chase us for the final bill).
2. 20 percent for his fee paid with the biweekly invoices of labor and materials. Subs are working on fixed-contract basis.
1. Can there be retainage on his fee in a cost-plus contract so that he has an incentive to finish the job?
2. How can one build in a budget process so we make sure the budget is in line as the project progresses. (I don't want to be hit with a surprise cost overrun).
3. Can we build in an incentive for him to come in within the estimated budget or are we just shooting ourselves in the foot. ie, corners will be cut to make the incentive.
Any thoughts you folks have on this would be welcome.