Fixed-price and cost-plus building contracts
The contract model establishes how price, progress claims, changes, reporting and risk are administered during construction. TCON works under fixed-price and cost-plus arrangements. Neither model is automatically better. The appropriate choice depends on the maturity of the documents, clarity of scope, existing conditions, project complexity and the amount of design flexibility the client wants to retain after contract. The discussion begins during Pre-Construction and tender, when unresolved information can be identified rather than hidden inside a total. The final terms are set by the executed building contract and need to be considered with the client's architect, legal advisor or other professional advisor where appropriate. The contract changes commercial administration, not the required construction standard. Both arrangements still require disciplined scope, records, approvals and cost reporting.
Fixed-price contracts
Under a fixed-price contract, the contract sum is set at execution for the defined scope and adjusted through variations and other contractual mechanisms where applicable. The model suits a project with sufficiently developed documentation, resolved selections and clear allocation of work. Its usefulness depends on the quality of the tender basis. Inclusions, exclusions, assumptions and allowances need to be understood before execution. Ambiguity does not disappear because the total is fixed. It returns later as a scope question. TCON develops the price from the current documents and schedules, then reviews the commercial basis with the client and architect. Changes during construction are documented and approved under the contract before the affected work proceeds where practicable.
Cost-plus contracts
Under a cost-plus contract, the client pays the actual cost of construction together with the builder's agreed margin and other amounts set out in the contract. The model can suit work with evolving scope, substantial existing-condition risk or a client who wants greater flexibility through delivery. Cost-plus does not remove the need for a budget, procurement control or prior approval. It increases the importance of current cost coding, supporting records and forecast information. TCON uses structured project cost coding in Xero and project-specific approval processes to administer the work. The reporting form and supporting information follow the contract, giving the client and advisor a current view of committed and actual cost.
Choosing between the models
A documented new home with settled selections may suit fixed price. A heritage renovation with concealed conditions, staged investigation or evolving interior scope may benefit from cost-plus. Some projects can be divided so defined work is fixed while genuinely unresolved work is treated under another agreed arrangement. The decision depends on the real condition of the project, not a preference applied to every client. TCON, the architect and client examine the documents, remaining choices, procurement path and risks identified during Pre-Construction. The client can then seek legal or commercial advice on the proposed terms. The chosen model needs to match the way decisions are expected to be made once construction begins.
Scope clarity and tender integrity
Both contract models depend on a clear description of the work. TCON prices from the architectural and consultant documents, schedules, site information and decisions available at tender. Major packages are measured and current trade quotations are obtained or tested where practicable. Inclusions, exclusions and assumptions are reviewed with the client and design team. This allows the parties to identify whether the proposed price covers the same scope they believe is being contracted. A detailed tender cannot eliminate every unknown inside an existing building or every later change to the brief. It can prevent known gaps from being treated as invisible and establish how unresolved information will be handled.
Allowances and unresolved information
An allowance is used where the scope or selection is identified but the final cost cannot yet be fixed accurately. It needs a clear basis, including what work or product it covers and how the contract treats any difference once the actual cost is known. Existing buildings may also contain conditions that cannot be confirmed until demolition or investigation provides access. TCON identifies these areas during Pre-Construction and tender, develops methodology where possible and states the commercial treatment proposed. The aim is not to present uncertainty as certainty. It is to define what is known, what remains open and which information or site event will allow the item to be finalised.
Variations and approved change
A variation may arise from a client instruction, design development, authority requirement, existing condition or another event dealt with under the contract. TCON records the proposed scope, cost and program effect before approval where the circumstances allow. The architect or consultant remains involved when the change affects their design or discipline. Once authorised, the instruction is carried into the current project record and site information. This protects the client from an unexplained cost movement and protects the delivery team from building against an informal direction. Urgent work and concealed conditions can require faster decisions, but the reason, authority and commercial consequence still need to be documented under the contract.
Progress claims and commercial reporting
Progress claims follow the executed contract. Under fixed price, claims commonly relate to agreed stages, milestones or the value of work completed. Under cost-plus, claims draw on actual cost records and the agreed margin, together with the supporting information required by the contract. TCON's project and finance teams coordinate cost coding, claims, approved variations and relevant forecast information. The client and any appointed advisor receive the commercial record in the agreed form and timing. Clear reporting does not change the underlying contract, and it does not make an evolving scope fixed. It gives the parties a current basis for understanding the cost position and addressing a question while the relevant information is available.
Building with TCON
Considered architecture demands considered building. Building with TCON is a complete account of how TCON works. Available on request and reviewed personally by Tim before release.
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Related.Our process, Negotiated tender, Cost-plus versus fixed price.