A cost plus percentage contract pays a contractor for all of its allowed expenses typically up to a set limit and a fixed percentage of profit over the expenses incurred. The following is a sample cost plus contract for your reference.

Sample cost plus percentage contract:

Raheja Constructors

2050 Bamako Place

Washington DC, 20521 – 2050

This agreement is made on 29th Jan, 2011 between Raheja Constructors, the owner, and PQR Industries, the contractor. The owner and the contractor agree to all the below given points:

  • The contractor accepts the relationship of trust and confidence established between his company and the owner by this agreement.
  • The work to be performed under this contract shall commence on 01 Feb 2011. The contractor shall use his best efforts to complete the said work on or before 31st Dec 2011.
  • The owner agrees to reimburse the contractor for the direct “cost of the work” in addition to the contractor’s fee.
  • In consideration of the performance of the contract, the owner agrees to pay the contractor as compensation for his services a contractor’s fee as 5% of all costs incurred over the total project length.
  • The contractor shall procure the necessary permits for the work of improvement. Owner shall pay the government fees and contractor’s charges for said permits.
  • The contractor agrees to maintain workers’ compensation and liability insurance throughout the course of the work.

Signature of the contractor: Raheja Constructors      Date: 29th Jan, 2011

Signature of the owner: PQR Industries              Date: 29th Jan, 2011

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