J.D. Beam Services

Cost Plus Contracting

Contracts managed on a cost plus arrangement afford the Owner the opportunity to have the General Contractor act as a team member, representing the Owner’s best interest before construction drawings are started.  This is accomplished by creating a contract that establishes the General Contractor’s responsibilities and corresponding fee while the project is still being programmed.  The fee is most often a lump sum amount or a percentage of the final cost of the project.  J. D. Beam, Inc. has worked under both of these types of fee agreements in the past.  Often the contract is amended, as the scope of work becomes defined, to provide a Guaranteed Maximum Price for the project.

After the pre-construction phase has been completed, and the construction drawings are finished J. D. Beam, Inc. will solicit prices from several qualified subcontractors for all portions of the project.  Once the bids have been received and reviewed by our team, we present the bids along with our summary and recommendations to the owner for their review and comments.  This procedure insures that the owner receives the benefits of a competitive construction marketplace.

Once the selection of subcontractors has been approved by the team, we enter into a fixed contract with each of the subcontractors based on the approved scope of work and their corresponding pricing.  During the construction phase of the project, a monthly detailed job cost report is produced listing all cost spent to date.  The owner has access to this report at all times.  This report includes materials, taxes, labor, labor burden, equipment and subcontractor costs broken down into individual line items by the type of work performed.  A bill is then produced each month based on this report plus the agreed upon fee for the project.

At the end of the project after all cost are complied, a final job cost report will be produced for review by the owner.  A final bill will be issued for the job based on actual cost plus the agreed upon fee for the project.  This method of contracting is used more than 75% of the time with our existing clients as it allows early engagement of General Contracting services and still protects the Owner without adding undue risk to either party.  J. D. Beam, Inc. has the capacity and flexibility to use any contracting system that is equitable to all parties.