While both cost-plus and fixed-price construction contracts have their advantages, there appears to be a growing preference for cost-plus contracts. In addition to assuring the Contractor about the amount of profits, it can also help a project commence sooner before completion of the project design or before the full scope of work is defined. On the other hand, it causes uncertainty in terms of the total costs of the project and the risk of cost overruns has to be taken on by the Owner. It may also lead to disputes between the Owner and Contractor about the actual construction costs.
