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Colorado Construction Contract Cost Plus or Fixed Fee

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CONSTRUCTION CONTRACT

THIS CONSTRUCTION CONTRACT (“Contract”), effective as of the date of the last party to sign below, is between , having an address at ("Contractor") and , having an address at ("Owner").

For valuable consideration the parties hereby agree as follows:

1. SCOPE OF WORK: Contractor shall provide all labor and materials, and perform all work necessary for the completion of the residence, structure, or improvements as described in the drawings and specifications signed by both Owner and Contractor (“Project”) and more particularly described as

Such drawings and specifications are hereby made a part of this Contract. Drawings and specifications shall contain a scale drawing showing the shape, size, and dimensions of the construction and equipment together with a description of the work to be done, materials to be used, and the equipment to be used or installed.

2. WORK SITE: The Project shall be constructed on the property of Owner located at

and more particularly described as (hereafter "the Work Site").

Owner hereby authorizes Contractor to commence and complete the usual and customary excavation and grading on the Work Site as may be required in the judgment of the Contractor to complete the Project. Unless called for in the drawings or specifications, no landscaping, finish grading, filling or excavation is to be performed at the Work Site by the Contractor.

3. TIME OF COMPLETION: Contractor shall commence the work to be performed under this Contract on or before and shall substantially complete the work on or before .

Contractor shall not be liable for any delay due to circumstances beyond its control including strikes, casualty, acts of God, illness, injury, or general unavailability of materials.

4. PERMITS: Contractor shall apply for and obtain such permits and regulatory approvals as may be required by the local municipal/county government, the cost thereof shall be included as part of the Project price.

5. SOIL CONDITIONS: Contractor shall have no responsibility for the condition of the soils at the Work Site. Any excavation, filling or other work required by the Owner other than the usual and customary excavation and grading shall be agreed to in a Change Order for an amount in addition to the Contract Price. Contractor shall not be responsible for any damages suffered by Owner as a result of the soil conditions at the Work Site.

6. INSURANCE: Contractor shall maintain general liability, workers compensation and builder's risk insurance.

7. SURVEY AND TITLE: If the Project is near the Owner’s property boundary, Owner will point out property lines to the Contractor. If the Owner or Contractor has any doubt about the location of the property lines, Owner shall provide Contractor with boundary stakes through a licensed surveyor. In addition, Owner shall provide Contractor documentation that Owner has title to the Work Site and shall provide Contractor copies of any covenants, conditions, or restrictions that affect the Work Site.

8. CHANGES TO SCOPE OF WORK: Owner may make changes to the scope of the work, including changes to the drawings and specifications, from time to time during the construction of the Project. However, any such change or modification shall only be made by written "Change Order" signed by both parties. Such Change Orders shall become part of this Contract. Owner agrees to pay any increase in the cost of the Project as a result of a Change Order. In the event the cost of a Change Order is not known at the time a Change Order is executed, the Contractor shall estimate the cost thereof and Owner shall pay the actual cost whether or not it is in excess of the estimated cost.

9. CONTRACT PRICE:

{COST PLUS}

Owner agrees to pay Contractor the actual cost to Contractor of materials plus the sum of $ for performing the services set forth in the scope of the work. Contractor shall be paid as follows:

OR

{FIXED FEE}

Owner agrees to pay Contractor the sum of $ for performing the services set forth in the scope of the work. Contractor shall be paid as follows:

Contractor shall furnish Owner appropriate releases or waivers of lien for all work performed or materials provided at the time the next periodic payment shall be due.

10. LATE PAYMENT/DEFAULT: A failure to make payment for a period in excess of ten (10) days from the due date shall be deemed a material breach of this Contract. If payment is not made when due, Contractor may suspend work on the job until such time as all payments due have been made without breach of the Contract pending payment or resolution of any dispute. Owner agrees to pay a late charge of 1% of all payments that are more than ten (10) days late plus interest at the rate of 1% per month.

11. DESTRUCTION AND DAMAGE: If the Project is destroyed or damaged for any reason, except where such destruction or damage was caused by the sole negligence of the Contractor or its subcontractors, Owner shall pay Contractor for any additional work done by Contractor in rebuilding or restoring the Project to its condition prior to such destruction or damage. If the estimated cost of replacing work already accomplished by Contractor exceeds 20 percent of the Contract price, either the Contractor or Owner may terminate this Contract. Upon termination by either party, Contractor shall be excused from further performance under this Contract and Owner shall pay Contractor a percentage of the Contract price in proportion to the amount of work accomplished prior to the destruction or damage.

12. ASSIGNMENT: Neither party may assign this Contract, or payments due under the Contract, without the other party’s written consent. Any such assignment shall be void and of no effect.

13. INTERPRETATION:

(a) Interpretation of Documents. The Contract, drawings, and specifications are intended to supplement one another. In the event of a conflict, the specifications shall control the drawings, and the Contract shall control both. If work is displayed on the drawings but not called for in the specifications, or if the work is called for in the specifications but not displayed on the drawings, Contractor shall be required to perform the work as though it were called for and displayed in both documents.

(b) Entire Agreement. This Contract constitutes the entire agreement of the parties. No other agreements, oral or written, pertaining to the work to be performed under this Contract exists between the parties. This Contract may only be modified only by a written agreement signed by both parties.

(c) Governing Law. This Contract shall be interpreted and governed in accordance with the laws of the State of Colorado.

14. ATTORNEYS’ FEES AND COSTS: If any party to this Contract brings a cause of action against the other party arising from or relating to this Contract, the prevailing party in such proceeding shall be entitled to recover reasonable attorney fees and court costs.

15. PERFORMANCE:

(a) Contractor may, at its discretion, engage licensed subcontractors to perform work pursuant this Contract provided Contractor shall remain fully responsible for the proper completion of the Project.

(b) All work shall be completed in a workman-like manner and in compliance with all building codes and applicable laws. To the extent required by law, all work shall be performed by individuals duly licensed and authorized by law to perform said work.

(c) Contractor agrees to remove all debris and leave the premises in broom clean condition.

16. WARRANTY: Contractor's warranty shall be limited to defects in workmanship within the scope of work performed by Contractor and which arise and become known within one (1) year from the date hereof. All said defects arising after one (1) year and defects in material are not warranted by Contractor. Contractor hereby assigns to Owner all warranties on materials as provided by the manufacturer of such materials.

AGREED:

CONTRACTOR:

Signature

Print Name & Title

Date

License Number

Name and Address of License Holder

OWNER:

Signature

Print Name

Date

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What the Colorado Construction Contract Cost Plus or Fixed Fee Is

The Colorado Construction Contract Cost Plus or Fixed Fee is a written agreement that establishes whether a construction project will be billed on a cost-plus basis (reimbursing actual costs plus an agreed fee or percentage) or as a fixed-price contract (single lump-sum for the work). This template frames project scope, payment terms, allowance and change order procedures, retainage, schedule, dispute resolution, and responsibilities for permits and inspections. It is intended to create predictable payment mechanics and risk allocation between owner and contractor for work performed in Colorado.

Why Choosing the Right Cost Structure Matters

Selecting cost-plus or fixed fee affects risk allocation, cash flow predictability, and change-order handling; it also shapes retainage and warranty triggers under Colorado law and standard construction practice.

Why Choosing the Right Cost Structure Matters

Who Typically Completes This Colorado Construction Contract

Owners, general contractors, subcontractors, and construction managers use this contract to document financial and performance terms for Colorado projects.

  • Commercial owners and developers preparing project payment and cost-control terms for design-build or CM arrangements.
  • General contractors formalizing whether work will be billed at cost plus fee or at a fixed lump sum.
  • Subcontractors confirming scope, allowable reimbursable costs, and markup rules tied to the prime contract.

Use this template when parties need a clear baseline for billing method, cost tracking, change orders, and dispute resolution during a Colorado construction project.

Who Can Sign and Why Their Role Matters

General Contractor

The authorized signatory for a contractor (project executive or owner) binds the contracting entity to payment and performance obligations; ensure signing authority is documented to avoid later ratification disputes.

Project Owner

An owner with contracting power (corporate officer or authorized representative) accepts budget exposure and payment commitments; their signature triggers invoicing cycles and any notice obligations required by the contract.

Core Sections to Include in a Professional Colorado Construction Contract

A complete agreement addresses scope, pricing method, reimbursable cost rules, schedule, change orders, retainage, insurance, warranty, and dispute resolution to reduce ambiguity and manage project risk.

Scope of Work

A precise description of deliverables, plans, and specifications with references to drawings and addenda so change orders are clearly identified and scope creep is minimized.

Pricing Method

Explicitly state whether the contract is Cost Plus (define reimbursable line items and allowable markups) or Fixed Fee (state lump-sum amount and what is excluded).

Reimbursable Costs

List eligible direct costs (labor, materials, subcontractor invoices, equipment) and define documentation requirements, invoicing frequency, and retainage application on reimbursable items.

Change Orders

Establish an approval workflow, pricing rules for changes, time impacts, and required signatures to validate any scope or cost adjustments before work proceeds.

Payment Terms

Detail invoice timing, progress payment schedule, retainage percentage, interest on late payments, and any conditional payment rights tied to lien waivers or certifications.

Risk Allocation

Address insurance, indemnity, warranties, force majeure, and dispute resolution methods (mediation, arbitration, jurisdiction) to define remedies and litigation posture.

Step-by-Step: How to Complete the Contract

Follow these steps in order to populate, review, and finalize the Colorado Construction Contract for either cost-plus or fixed-fee engagements.

  • 01
    1. Choose Pricing: Select Cost Plus or Fixed Fee and enter associated amounts or percentages.
  • 02
    2. Define Scope: Attach plans, specs, and essential exhibits that define work and exclusions.
  • 03
    3. Set Billing: Specify invoicing frequency, retainage rules, and required backup documents.
  • 04
    4. Authorize Signers: Confirm signatory authority and obtain signatures with dates and titles.

Typical Workflow for Using This Contract in a Project

A predictable workflow helps parties exchange terms, approve changes, and process invoices while preserving a clear audit trail.

  • Drafting: Owner or GC prepares draft with scope and pricing option.
  • Review: Each party reviews, redlines, and clarifies reimbursable costs.
  • Execution: Authorized representatives sign and date the final agreement.
  • Billing: Contractor submits invoices per billing cycle with supporting documentation.

Online Setup: Recommended Signing and Authentication Settings

When completing and circulating the contract electronically, configure fields and authentication to match the project risk profile and compliance needs.

Field Configuration
Authentication Email link plus SMS code for signer verification
Signature Fields Signature, printed name, title, date, and initials for each party
Conditional Fields Show cost-plus rate fields only when Cost Plus selected
Audit Trail Enable IP, timestamp, and action log capture

Digital Signing and File Format Considerations

Use PDF or DOCX originals and enable platform features that preserve an audit trail and tamper evidence before sending for signature.

  • File Formats: PDF, Word DOCX, or editable templates
  • Integrations: Connectors include Procore, NetSuite, and Google Workspace
  • Authentication: Email, SMS codes, and optional KBA

Comparing eSignature Options for Executing Construction Contracts

A clear vendor comparison helps choose an eSignature provider that supports required compliance, bulk sends, and HIPAA or industry needs without overstating capabilities.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial No No Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Security and Compliance Items to Keep in Mind

Encryption: TLS 1.2/1.3 in transit
Data at Rest: AES-256 encrypted storage
Certifications: SOC 2 Type II, ISO 27001
HIPAA BAA: Available when needed
Audit Trail: IP, timestamps, action logs
Authentication: Email, SMS, or advanced methods

Common Risks and Legal Consequences of Contract Errors

Ambiguous Scope: Disputes and extra costs
Missing Signature: Enforceability challenge
Incorrect Pricing: Payment disputes
Improper Notarization: Recording rejection risk
Late Notices: Waived claims or defenses
Tax Reporting: Backup withholding or penalties

Frequent Preparation Mistakes to Avoid

  • Failing to specify allowed reimbursable costs and documentation creates recurring disputes about what is billable and delays approvals.
  • Using vague change-order language without an approval workflow can permit unauthorized work and undermine budget controls during project execution.
  • Not confirming signatory authority leads to rescission or ratification issues when a party later claims a signer lacked power.
  • Neglecting to align retainage percentages and release conditions with subcontract agreements can block payments and trigger mechanic lien filings.

Practical Tips for Accurate and Efficient Completion

Adopting standard clauses and clear documentation practices reduces disputes and accelerates payment processing for construction contracts.

Standardize Reimbursables
List reimbursable cost categories and required backup (invoices, timesheets) to avoid later invoice rejections and preserve auditability.
Use Clear Change Orders
Require written change orders with price and schedule impacts and sign-off by authorized parties before performing additional work.
Copy Key Exhibits
Attach drawings, schedules, and allowance breakdowns as exhibits to prevent conflicting interpretations of the scope.
Confirm Authorization
Document corporate resolutions or written delegation showing the signer can bind the contracting entity to avoid enforceability issues.

Timing, Notice, and Payment Deadlines to Track

Track critical dates in a project calendar so notice, billing, and statutory deadlines are met during construction.

Progress Billing Date:

Set monthly or milestone billing dates and due dates to trigger payment cycles.

Change Order Notice:

Specify the time window to submit change order requests after discovery.

Retainage Release:

Define conditions and timing for partial and final retainage release.

Warranty Period:

Document warranty start (completion date) and duration for repairs.

Dispute Notice:

Require prompt written notice to preserve rights and escalate per contract terms.

Real-World Examples of Using Electronic Contracts in Construction

These short examples show how contractors and owners used online execution and structured contracts to simplify project administration.

Optica Ventures Example

A mid-size developer standardized a cost-plus schedule for tenant improvements to streamline approvals.

  • They attached cost categories and invoice templates.
  • The change-order workflow reduced approval time and produced clearer payment records for project accounting and lender draws.

Martin Properties Example

A residential contractor adopted fixed-fee templates for renovation jobs to set client expectations.

  • They included defined allowances and contingency rules.
  • This clarity cut invoice disputes and shortened close-out by consolidating final payments and warranty obligations in one signed document.

Frequently Asked Questions About the Colorado Construction Contract Cost Plus or Fixed Fee

Answers to common execution and interpretation questions for Colorado construction contracts, focusing on signatures, notarization, and billing mechanics.


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