A Study on Problems and Solutions for Cost-Plus Contract of Building Projects

• Main Authors: Wen-Hsien Huang, 黃文賢
• Other Authors: 曾惠斌
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/28243399572422037912

碩士 === 國立臺灣大學 === 土木工程學研究所 === 97 === Abstract Cost Plus contracts have been applied to some construction cases in Taiwan recently. The chief reason is that the price of construction material is getting higher and higher and the contractors can’t afford to suffer the great losses. Most construction companies have little desire to procure contracts. In addition, many construction owners think the economy in Taiwan will be getting better and better, so they are in a hurry to find contractors to finish the building so as to sell them as soon as possible. In Cost Plus contract, the owner is responsible for the risk of wild fluctuation in construction material and the contractor only earn constant percent of profits. Cost Plus contract seems like a good way to serve the owner’s purpose and solve the contractor’s problem above. However, there are not many projects adopted Cost Plus contract. Some of them are under construction. Few of them have finished already. The owners are very careful in choosing the contractor and only give their projects to the well-known construction corporations. The most reason is that there is little experience in Cost Plus contract in Taiwan. The content of the contract is not perfect and many things have to be try and error. In this condition, it will have a great risk for the owner to give their project to a medium or a small construction company; therefore, the cost plus contract is not suitable to them. It means that the content of cost plus contract needs to be improved. Finding the problems and try to solve them is one of the good ways to improve it. However, we are not able to achieve the ideal in a short time. There is little research focused on cost plus contract in Taiwan, and its case studies are rare, either. This research collects and reads some theses that are related to cost plus contract at first. Then, explore how to run the cost plus contract in some construction cases in Taiwan by interviewing the specialist and the experience of taking part in the real construction cases. After that, collect all of the problems that might be happened during the period of construction and try to analyze how to solve them. Finally, send out questionnaire to check whether the method to solve these problems are reasonable and objective so as to give some advices to the owners that would like to make a cost plus contract. This research explores and analyzes the cost plus contract through contract, subcontractor selecting, payment, procurement, and so on. After analyzing, we find that most of the arguments during the period of construction can be solved by meeting. It can set out the regulation that how to share the additional cost in contract. In addition, most of the construction corporations always like to choose the same subcontractors to reduce the cost. In fact, the new subcontractor might make the project more competitive. Besides, this research also finds it is not a good way to give the contractors constant percent of profits. It should put more cost pressure to the contractors and give the contractors some money if they reduce the cost of the project. It is of great help to reduce the cost of the project. Finally, this research finds inviting bidding more times sometimes can’t reduce the cost, because some of the bidders will make inquiries about the project. Key words：cost plus contract, compact framework, subcontractor selecting, payment, cost plus contract through contract.