What it means
Under cost-plus, the owner reimburses documented costs: labour, materials, equipment and subcontracts. The contractor then adds the agreed fee. Some cost-plus contracts include a cap, in which case they resemble a guaranteed maximum price.
The structure suits projects where the scope is still being defined or cannot be fully known in advance.
Why it matters
Cost-plus gives flexibility, since work can begin before every detail is settled, and the owner pays only for what is really spent. The risk is that without good controls the final cost is uncertain.
Success depends on open books, clear approval processes and regular cost reporting.
How HSM handles it
HSM is comfortable working in an open, transparent way. When cost-plus is the right structure, we provide regular cost reports, agree on rates in advance and show backup for the costs we invoice.
Self-performed trades make this easier to follow. Our electrical, mechanical and interior systems labour is tracked by our own crews against clear rates, so you see the actual hours and not a bundled subcontract price.
We also advise owners on whether cost-plus, a capped version or a fixed price suits their stage of design, so the choice is made on purpose and not by default.
What to plan for
Agree early on reporting: how often you will see costs, what backup you want, and who approves purchases above a set amount. Clear rules keep an open-book job comfortable for everyone.