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Construction in 2022: Why the Cost-Plus Program Just Makes Sense 

February 11, 2022


Whether you are considering building a new house or renovating your current home, you have almost certainly noticed a spike in material prices over the last two years. A combination of supply chain disruptions and increasing inflation rates have resulted in continually higher and higher prices for materials commonly used in construction. This shortage of materials has been further compounded by a surge in demand; the current real estate boom has resulted in very high demand for construction materials for both new construction and renovations. Additionally, the newly passed infrastructure bill will further increase demand for these materials, adding government contractors to the list of parties scrambling to acquire materials for their projects. The combination of all of these factors can make it difficult to source materials, budget accurately, and finish the project on time. This is where RSU’s Cost-Plus Program comes into play.

What is a Cost-Plus Program?

There are typically two methods of billing for contractors: fixed cost or cost-plus. While fixed cost contracts are frequently used if the prices of materials are consistent, most contractors switch to a cost-plus program during periods where it is difficult to source materials, and the prices of those materials are steadily increasing. In a fixed cost contract, the contractor carefully estimates the cost of the project, and any overage beyond that cost is the contractor’s profit. Comparatively, a cost-plus contract charges the customer for the materials and labor, plus a percentage fee for the contractor’s profit. Additionally, RSU sends two monthly invoices under this system, meaning you can easily track the expenses and progress of your project.

Why Choose RSU?

While experience always matters when choosing the right contractor for your next project, it is particularly important to find a tenured team when material prices are high and their availability is uncertain. Additionally, you want to ensure that your contractor guarantees the quality of his or her work. For these reasons, the people of Middle Tennessee have trusted RSU Contractors for over 40 years. RSU’s Cost-Plus Program begins with a budget proposal based on the scope of the project. Once the initial budget is put together, RSU will bill you twice a month – this allows you to easily compare the budget to actual costs, as well as track any requested changes in project scope. This is also the most transparent and honest method of billing – there are no hidden charges or fees, as everything is laid out for the customer to review. Cost-Plus contracts are also more flexible with customer requests, and they take less time to get started as the plans do not have to be fully fleshed out before beginning the project. There are always fluctuations in jobs and budgets, but this allows the customer to stay in control of the project and process. RSU offers years of experience, impeccable service, and high-quality work – leverage their tenure for your next big renovation project. If you have been dreaming of the perfect home renovation, trust the professionals at RSU Contractors.