Understand the basic distinction
A stipulated-sum agreement sets a price for the defined work. Cost-plus arrangements reimburse defined costs plus an agreed fee; a guaranteed maximum price is an additional contractual feature, not an automatic part of every cost-plus arrangement. AIA Contract Documents distinguishes these payment methods.
Questions for a fixed-price proposal
- What drawings, specifications, exclusions, and allowances define the price?
- Which changes or concealed conditions can adjust it?
- How are owner selections and schedule changes handled?
Questions for a cost-plus proposal
- Which costs are reimbursable, and how is the fee calculated?
- What records support payment applications and review?
- How are commitments, forecasts, and changes reported?
- Is there a maximum price, and what can change that maximum?