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Course Details

Course Information
  • smart_display Format

    Live Online with Live Q&A

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Tuesday, May 20, 2025

  • schedule Time

    1:00 PM E.T.

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE webinar will examine the most frequently used pricing structures in construction contracts. The panel will discuss the project types for which each structure is typically used, the advantages and disadvantages of each for contractors and owners, and drafting considerations for contract provisions incorporating these structures. The panel will also examine the impact of new tariffs on selecting the right pricing structure for a project.

Faculty

Adam E. Richards
Miscellaneous

Mr. Richards is a Board Certified Specialist in Construction Law by The Florida Bar and focuses his practice on construction, providing transactional, project consultation, and dispute resolution/litigation services to Florida’s construction industry, including national and international general contractors, owners/developers, associations, local builders/trades, and design professionals in the public and private sectors. Mr. Richards has dealt with a wide range of construction projects throughout the state, including hotels, courthouses, treatment plants, residential/commercial buildings including one of the tallest in the country, restaurants, a major expressway in Miami as well as other road improvements, and luxury homes. 

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Nicholas A. Dube
Of Counsel
Preti, Flaherty, Beliveau & Pachios, Chartered, LLP

Mr. Dube is a member of the firm’s Litigation and Construction Law Groups. He advises executives, multinational corporations, and large-scale institutions in the financial services, consumer goods, and pharmaceutical sectors on a wide range of litigation matters. Mr. Dube’s experience includes complex commercial litigation, risk assessment and internal investigations, contracts and securities issues, professional liability defense, antitrust and anti-corruption laws, and constitutional law.

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Description

The pricing structure is one of the most important decisions made when negotiating a construction contract because it not only establishes the cost of the project but also determines the rights and responsibilities of the parties. There are three basic types of pricing structures in construction contracts: (1) fixed price; (2) cost plus (with or without a guaranteed maximum price or GMP); and (3) unit price. Counsel should not rely on form contracts, but rather be able to carefully negotiate critical provisions and customize the contract for their clients' needs.

Under the fixed price structure, a contractor is paid a sum certain for the project and bears the risks of increased costs unless changes have been allowed for in the contract (e.g., a properly issued change order). In contrast, under cost-plus contracts, the contractor is paid the full price for agreed-upon costs that include actual construction related costs and costs associated with contractor overhead and profit. Cost-plus contracts may include a GMP which caps the owner's maximum liability for construction costs incurred on the project. Finally, under unit price contracts, the contractor sets a price for each unit of work to be completed. Typically, the unit cost includes the contractor's profit and overhead.

Each type of structure is best used under certain circumstances, has advantages and disadvantages for each party to the contract, and contains critical provisions. Therefore, it is imperative that counsel understand the key differences between the pricing models to help clients select the right structure for their project.

Additionally, with the imposition of new tariffs impacting the supply chain and the construction industry, counsel should understand how to address tariffs in the construction contract and which structure might be best to accommodate project cost uncertainty moving forward.

Listen as our expert panel closely examines the most frequently used pricing structures for construction contracts. The panel will provide advantages and disadvantages for each and offer best practices for drafting. The panel will also address which pricing structure may be best to accommodate potentially rising construction costs under the new tariffs.

Outline

  1. Introduction: the importance of selecting the right pricing structure for the project
  2. Fixed price
    • Types of projects for which this structure is often used
    • Advantages
    • Disadvantages
    • Drafting considerations
  3. Cost plus (with or without GMP)
    • Types of projects for which this structure is often used
    • Advantages
    • Disadvantages
    • Drafting considerations
  4. Unit price
    • Types of projects for which this structure is often used
    • Advantages
    • Disadvantages
    • Drafting considerations
  5. Selecting the right pricing structure
    • Contractor and owner considerations
    • New tariff impact
  6. Practitioner takeaways

Benefits

The panel will review these and other key considerations:

  • What are the most common pricing structures used in construction contracts? For what types of projects are each most frequently used?
  • What are the advantages and disadvantages for contractors for each? For owners?
  • What are key contractual provisions for each pricing structure?
  • How may the new tariffs impact pricing structure selection? Contractual provisions?