The Cost+ Model: A Construction Contract Based On Collaboration And Cost Control

A new form of contract has entered Dutch construction practice: the Cost+ agreement. This construction contract, based on the Cost+ model, offers an alternative to traditional fixed‑price arrangements, particularly for construction projects characterised by a high degree of uncertainty and risk. In such circumstances, contractors are often reluctant to commit to (a contract for) works for a fixed contract sum. The Cost+ model addresses this challenge. Under this structure, the contractor's actual costs are reimbursed, with the potential for an additional upside or, conversely, a reduction through a so‑called pain/gain mechanism.

The Cost+ model

Traditional construction contracts based on fixed pricing and strict risk allocation tend to be relatively prone to conflict. While the client has an interest in the work being carried out in accordance with agreed (quality) requirements and timelines and at the agreed fixed contract sum, the contractor is