Cost Plus Contract for the Netherlands

Cost Plus Contract Template for Netherlands

A Cost Plus Contract under Dutch law is a comprehensive agreement where the client agrees to reimburse the contractor for all allowed costs incurred in executing the work, plus an additional fee or percentage for overhead and profit. This contract type, governed by Dutch civil law principles, particularly the Dutch Civil Code (Burgerlijk Wetboek), provides detailed mechanisms for cost determination, verification procedures, and fee calculations. It includes specific provisions for cost reporting, audit rights, and payment procedures, while ensuring compliance with Dutch regulatory requirements regarding pricing, taxation, and commercial relationships.

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What is a Cost Plus Contract?

The Cost Plus Contract is particularly suitable for projects where the exact scope or costs cannot be accurately determined at the outset, common in complex construction, engineering, or consulting projects under Dutch jurisdiction. This contract type provides flexibility while maintaining cost transparency, as it details all allowable costs, markup calculations, and verification procedures. The agreement, governed by Dutch law and particularly the Dutch Civil Code (Burgerlijk Wetboek), establishes clear mechanisms for cost reporting, documentation requirements, and payment procedures. It's designed to protect both parties' interests by ensuring fair compensation for the contractor while providing the client with cost visibility and control mechanisms. The contract typically includes comprehensive provisions for cost categorization, audit rights, change management, and dispute resolution, all aligned with Dutch legal requirements and business practices.

What sections should be included in a Cost Plus Contract?

1. Parties: Identification and details of the contracting parties

2. Background: Context of the agreement and brief description of the parties' intentions

3. Definitions: Definitions of key terms used throughout the agreement, including specific cost-related terminology

4. Scope of Work: Detailed description of services or works to be provided under the cost-plus arrangement

5. Cost Structure: Definition and categorization of allowable costs, including direct costs, overhead, and other reimbursable expenses

6. Fee Calculation: Methodology for calculating the 'plus' component (fee/profit margin) and its application

7. Payment Terms: Payment procedures, timing, and documentation requirements for cost reimbursement and fee payment

8. Cost Verification: Procedures for cost validation, audit rights, and required supporting documentation

9. Reporting Requirements: Regular reporting obligations regarding costs, progress, and financial tracking

10. Duration and Timeline: Contract period, key milestones, and any specific timing requirements

11. Obligations of the Contractor: Contractor's responsibilities including cost management and reporting

12. Obligations of the Client: Client's responsibilities including payment and cooperation

13. Change Management: Procedures for handling changes to scope, costs, or other contract elements

14. Termination: Grounds and procedures for contract termination and associated cost settlements

15. Liability and Indemnification: Allocation of risks and responsibilities between parties

16. Governing Law and Jurisdiction: Confirmation of Dutch law application and jurisdiction

17. General Provisions: Standard contractual provisions including notices, amendments, and severability

What sections are optional to include in a Cost Plus Contract?

1. Performance Incentives: Optional bonus structures for achieving cost savings or performance targets

2. Cost Caps: Include when there are agreed maximum limits on specific cost categories or total costs

3. Subcontracting: Include when subcontractors will be engaged, specifying approval processes and cost treatment

4. Insurance Requirements: Detailed insurance obligations when project-specific coverage is needed

5. Intellectual Property: Include when the work involves creation or use of intellectual property

6. Confidentiality: Detailed confidentiality provisions when sensitive cost or technical information is involved

7. Force Majeure: Include when specific force majeure provisions are needed beyond standard Dutch law

8. Environmental Compliance: Include for projects with significant environmental aspects

9. Quality Management: Include when specific quality standards and procedures need to be documented

What schedules should be included in a Cost Plus Contract?

1. Schedule A - Detailed Scope of Work: Comprehensive description of works or services to be provided

2. Schedule B - Cost Breakdown Structure: Detailed categorization of allowable costs and calculation methodologies

3. Schedule C - Fee Calculation Method: Detailed explanation of how the 'plus' component is calculated

4. Schedule D - Required Documentation: List of required supporting documents for cost verification

5. Schedule E - Rate Card: Agreed rates for labor, equipment, and other standard costs

6. Schedule F - Reporting Templates: Standard formats for cost and progress reporting

7. Schedule G - Key Personnel: List of key team members and their roles

8. Appendix 1 - Cost Control Procedures: Detailed procedures for cost management and control

9. Appendix 2 - Quality Standards: Applicable quality standards and verification procedures

10. Appendix 3 - HSE Requirements: Health, safety, and environmental requirements if applicable

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

Netherlands

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Construction

Engineering

Consulting

Information Technology

Research and Development

Manufacturing

Defense

Energy

Infrastructure

Professional Services

Industrial Projects

Aerospace

Relevant Teams

Legal

Finance

Commercial

Procurement

Operations

Project Management

Risk Management

Accounting

Contracts Administration

Business Development

Cost Control

Relevant Roles

Project Manager

Contract Manager

Commercial Director

Financial Controller

Cost Engineer

Procurement Manager

Legal Counsel

Operations Director

Finance Director

Commercial Manager

Project Engineer

Risk Manager

Account Executive

Chief Financial Officer

Construction Manager

Program Director

Cost Accountant

Quantity Surveyor

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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