General Contractor Agreement Cost Plus Fee Template for England and Wales

A General Contractor Agreement Cost Plus Fee is a construction contract where you pay the contractor for actual project costs plus a predetermined management fee. This contract type offers transparency and flexibility, making it ideal for complex projects where the full scope cannot be determined upfront. Unlike fixed-price contracts, this arrangement allows for adjustments as work progresses while maintaining clear cost accountability.

When do you need this document?

You need this agreement when undertaking construction projects with uncertain scope or specifications. It's particularly valuable for renovation projects in older buildings where hidden issues may emerge, emergency repair works requiring immediate action, or complex commercial developments where design changes are likely. The cost-plus structure works well when you want transparency over project expenses and prefer collaborative contractor relationships. This contract type is also suitable for projects using specialised materials or techniques where accurate upfront pricing is difficult to establish.

Key legal considerations

The agreement must clearly define what constitutes reimbursable costs and exclude items like contractor overhead already covered in the fee structure. You should establish robust cost verification procedures, including requirements for receipts, invoices, and regular reporting. Payment provisions must comply with the Construction Act, including proper notice procedures and adjudication rights. The contract should specify the fee calculation method, whether percentage-based or fixed amount, and include provisions for cost auditing. Risk allocation clauses are crucial, particularly regarding cost overruns, delays, and variations. Consider including cost ceilings or target cost mechanisms to maintain budget control.

Legal requirements in England and Wales

Under the Housing Grants, Construction and Development Act 1996, your agreement must include compliant payment provisions with proper notice requirements and adjudication procedures. The Construction Act 2009 amendments require specific payment timing and notice procedures that must be incorporated. You must ensure the contractor provides adequate insurance coverage and complies with Construction (Design and Management) Regulations 2015 for health and safety obligations. The Supply of Goods and Services Act 1982 establishes implied terms for reasonable care and skill that apply to construction services. Late payment provisions must align with the Late Payment of Commercial Debts (Interest) Act 1998. If involving subcontractors or third parties, consider the Contracts (Rights of Third Parties) Act 1999 implications for enforcement rights.