Although there are many variations in pricing models, the two most common we provide are “Cost Plus” w/ GMP (Guaranteed Maximum Price) & “Stipulated Sum Pricing”. All contracts constructed by the AIA (American Institute of Architecture).
In the case of Stipulated Sum, a scope of work is determined. A total price is agreed upon, a progress payment schedule is created, and then we begin construction.
For “Cost Plus” w/ GMP, often the full scope of work is not determined and the project evolves over time. This is often the prefered direction. As a contractor, we find it very helpful to all parties (typically the architect, client, interior designer, and the contractor) to be involved from the beginning of the design phase.
We will price different phases of the project as they are drawn, so as to ensure we stay inline with a client’s budget. This method seems to save time and money, and allows the relations to be open and healthy at all times.