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Cost plus contract invoicing

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Posted by: from Mississauga
11/24/2016 at 11:04:44 PM

I have a cost plus contract in which we have charged a flat fee to manage the work being done plus the actual cost of work.

Now, part of our job will also be to get some of the work done ourselves. with me and my crew.

My question is: for the portion of the work that we perform ourselves, do we invoice the owner for the hourly rate of each worker? or should we invoice for the lump sum of the work being done (ei drywall and plaster). as a subcontractor would?

Just need to clarify this, as it is our first cost plus contract.

Thanks

REPLIES (6)
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Date/Time11/25/2016 at 11:25:12 AM

Invoice as if you were subcontractor to yourself or job and then charge client.

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Date/Time11/25/2016 at 1:01:10 PM

In those contract arrangements (cost plus) we make it very clear in the contract how "own work" is going to be dealt with. The easiest way is to identify in the contract the regular hourly rates for any potential work that our guys could get involved with on the job. That way all that you are having to track and report on are the hours spent. The hourly rates should already include your OH&P so you should not be applying an additional markup to your labour rates.

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Date/Time11/25/2016 at 2:28:36 PM

Be careful with the cost plus contracts whenever they involve more than one "contractor". If you are charging I would suggest a lump sum charge, but be able to justify every detail.

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Pete from PnG Builders in Chestermere
Date/Time11/25/2016 at 5:07:51 PM

Know your numbers and talk to your customer, give them the option...then write up a addendum to the contract where both parties agree and sign.

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Ryan from Mangos Renos in Mississauga
Date/Time11/25/2016 at 6:46:56 PM

Invoice as a subcontractor for all work done by you and your crew. If you don't do it you would have to manage someone else to do the work under your flat rate for managing. If you are overseeing the entire project it may be hard to classify every little project you get your guys to do. Generalization usually works best IE carpentry work supplied by "your company name". Drywall can be considered carpentry work

Hope this helps.

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Date/Time11/26/2016 at 7:39:56 PM

You can invoice your client in lump sum for the part you are going to do outside if the cost plus contract.

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