Page 64 - BASIC PRINCIPLES OF QUANTITY SURVEYING PROFESSIONAL PRACTICES

Politeknik Kota Bharu

3.4.2.2 Cost reimbursement or cost plus

• A cost reimbursable contract (sometimes called a cost-plus

contract) is one in which the contractor gets reimbursed for the

actual expenses incurred in doing the work, plus an
additional fee.

• When the nature or scope of the work to be done cannot be

properly defined at the outset, and the risks associated with

the work are high, such as emergency work, a cost
reimbursable contract may be used (for example, urgent

alteration or repair work, or if there has been a building failure

or a fire requiring immediate reconstruction or replacement of
a building so that the client can continue to operate their

business).

• Tendering may take place based on a rough specification, any
drawings, and a cost estimate.

• The project type is illustrated by Table 3.2.

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