When you sign a construction contract, one of the biggest choices is how the price is structured. The two most common approaches are fixed price and cost plus. Understanding the difference helps you pick what fits your project and your comfort with risk.
Fixed price contracts
A fixed price contract, sometimes called a lump sum, sets one total price for the whole scope of work up front. You know the number before the first nail goes in.
Best for: projects with a clear, well defined scope, like a defined remodel or a plan that is fully drawn.
Upside: budget certainty and simple planning. Trade off: changes to the scope mean change orders, and the contractor carries the risk of surprises, which is priced in.
Cost plus contracts
A cost plus contract pays for the actual cost of materials and labor, plus an agreed fee for the contractor. Costs are documented and passed through transparently.
Best for: custom builds, complex renovations, or projects where the scope is still evolving.
Upside: flexibility and transparency, you see where every dollar goes. Trade off: the final number is not locked in at the start, so it takes trust and clear communication.
How to choose
- If your plans are final and you want a locked budget, fixed price often fits.
- If you want flexibility to make decisions as the project develops, cost plus can serve you better.
- Either way, the quality of the contractor and the clarity of the scope matter more than the label.
What we do
10th Avenue Designs works on both fixed price and cost plus jobs, and we help you decide which structure fits your project during planning. Clear scope, clear communication, and clean execution come standard either way.
Explore our full range of services, or see how project management keeps your build predictable. Ready to talk? Book a meeting.
Planning a project in the CSRA?
Tell us what you have in mind and we will help you take the next step with clarity and a clear quote.