Cost Plus Contractor Agreement for Nigeria

Cost Plus Contractor Agreement Template for Nigeria

A Cost Plus Contractor Agreement governed by Nigerian law establishes a contractual relationship where the contractor is reimbursed for all allowed costs incurred in executing the works, plus an additional agreed-upon fee or percentage for profit and overhead. This agreement type is particularly suited for complex projects in Nigeria where the exact scope may be difficult to define upfront or where flexibility is required. The document incorporates specific provisions to comply with Nigerian construction laws, labor regulations, and tax requirements, while also addressing local content requirements where applicable.

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What is a Cost Plus Contractor Agreement?

The Cost Plus Contractor Agreement is essential for projects in Nigeria where traditional fixed-price contracts may not be suitable due to uncertainty in scope or complexity of works. This document type is commonly used in large-scale construction, infrastructure, and industrial projects where flexibility in scope and execution is required. The agreement details the mechanism for cost reimbursement, profit calculation, and contractor's obligations while ensuring compliance with Nigerian regulatory requirements including the Public Procurement Act, Labour Act, and relevant construction industry regulations. It includes specific provisions for cost verification, audit rights, and local content requirements, making it particularly suitable for projects requiring transparent cost management and regulatory compliance.

What sections should be included in a Cost Plus Contractor Agreement?

1. Parties: Identification of the employer and contractor, including registration details and addresses

2. Background: Context of the agreement, project overview, and basis for engagement

3. Definitions and Interpretation: Definition of key terms, including 'Cost', 'Fee', 'Works', and interpretation rules

4. Scope of Works: Detailed description of the works to be performed by the contractor

5. Contractor's Obligations: Core responsibilities, including compliance with laws, standards, and specifications

6. Cost and Fee Structure: Definition of allowable costs, fee calculation, and payment mechanism

7. Payment Terms: Billing procedures, payment timeline, and documentation requirements

8. Project Timeline: Commencement date, completion date, and key milestones

9. Quality and Standards: Required quality standards, inspections, and compliance with Nigerian building codes

10. Variations: Process for handling changes to scope or costs

11. Records and Audit Rights: Requirements for maintaining cost records and employer's audit rights

12. Insurance and Indemnities: Required insurance coverage and indemnification provisions

13. Termination: Grounds and procedures for contract termination

14. Dispute Resolution: Process for resolving disputes, including Nigerian jurisdiction requirements

15. General Provisions: Standard boilerplate clauses including notices, assignment, and entire agreement

What sections are optional to include in a Cost Plus Contractor Agreement?

1. Performance Security: Required when the project value exceeds certain thresholds or when requested by the employer

2. Local Content Requirements: Needed for projects subject to Nigerian local content laws

3. Environmental Compliance: Required for projects with significant environmental impact

4. Health and Safety: Detailed section needed for high-risk construction projects

5. Intellectual Property Rights: Required when the works involve design or technological elements

6. Force Majeure: Detailed provisions for projects in volatile regions or with specific risk factors

7. Anti-Corruption Provisions: Enhanced provisions for public sector projects or international contracts

8. Subcontractor Provisions: Required when subcontracting is anticipated or permitted

What schedules should be included in a Cost Plus Contractor Agreement?

1. Schedule 1 - Scope of Works: Detailed technical specifications and drawings

2. Schedule 2 - Cost Schedule: Breakdown of allowable costs and excluded costs

3. Schedule 3 - Fee Calculation: Detailed mechanism for calculating the contractor's fee

4. Schedule 4 - Key Personnel: List of key contractor personnel and their roles

5. Schedule 5 - Programme of Works: Detailed project timeline and milestones

6. Schedule 6 - Required Insurance: Specific insurance requirements and coverage levels

7. Schedule 7 - Forms and Procedures: Standard forms for variations, payments, and completion certificates

8. Schedule 8 - Quality Standards: Detailed quality requirements and inspection procedures

9. Appendix A - Site Information: Details of the project site and conditions

10. Appendix B - Required Permits: List of required regulatory permits and responsibilities

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Nigeria

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Construction

Oil and Gas

Infrastructure Development

Mining

Industrial Manufacturing

Real Estate Development

Energy

Telecommunications

Healthcare Facilities

Educational Institutions

Relevant Teams

Legal

Commercial

Procurement

Finance

Operations

Project Management

Risk Management

Compliance

Technical Services

Contract Administration

Relevant Roles

Project Manager

Construction Manager

Contract Administrator

Commercial Director

Legal Counsel

Chief Financial Officer

Procurement Manager

Operations Director

Cost Controller

Quantity Surveyor

Risk Manager

Technical Director

Compliance Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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