Contract models

The contract model fits the project.

TCON offers fixed price and cost-plus contracts. Both are supported by the same disciplines: clear scope, transparent reporting, structured change management.

What contract model means

The contract model is the commercial framework that governs the build.

It determines how the price is set, how changes are priced, how progress claims work, how transparency on cost is maintained, and how risk is allocated between the builder and the client.

The contract model is not a small decision. The right model depends on the maturity of the documentation at contract, the complexity of the build, and the level of flexibility the client and architect want during delivery.

Fixed price contracts

Fixed price is the commercial framework where the contract sum is set at execution and held through the build. Variations are priced and approved as they arise. The model works well where the documentation is sufficiently developed at contract, where the scope is clearly defined, and where the client wants commercial certainty above all other considerations.

Making a fixed price contract work depends on discipline around inclusions, exclusions, assumptions and procurement timing before execution. Ambiguity in tender documentation creates downstream tension. TCON's approach to fixed price is to price directly from drawings and schedules, clearly define assumptions, and review inclusions and exclusions with the client and design team before contract.

Variations under fixed price are priced and formally approved before work proceeds. Site execution stays aligned with approved decisions rather than informal instructions.

Cost-plus contracts

Cost-plus is the commercial framework where the actual cost of construction is paid through the build, with a fee paid to the builder for managing the project. The client receives a live budget mapped to cost codes with visibility across budget allowances, actual costs and forecast-to-complete. The model works well where the project is complex, where scope is still evolving at contract, or where flexibility through delivery is important to the client.

Cost-plus depends entirely on the discipline with which the builder manages the commercial structure. Without disciplined cost tracking, documented approvals and transparent reporting, the model becomes opaque quickly. TCON manages cost-plus through structured cost coding in Xero, documented approvals for every procurement decision, and monthly or fortnightly progress claims with full transparency on actual costs and forecast.

For client-side advisors and project managers, this is supported by budget governance and cost code transparency. The model only works well when the builder is disciplined enough to keep the commercial picture current and understandable.

Choosing between them

The choice is not about which model is better. It is about which model fits the project.

A project with developed documentation and defined scope at contract is well suited to fixed price. A project with complex retention work, evolving scope, or significant unknowns at contract is better suited to cost-plus.

Some projects benefit from a hybrid arrangement where defined sections are priced fixed and unknown sections are priced cost-plus.

The discussion about contract model happens during the TCON Pre-Construction Program, alongside the discussion about tender pathway. The decision is made together by the client, architect and TCON before contract is drafted.

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Scope clarity and tender integrity

Both contract models depend on scope clarity. Complex projects often encounter difficulties when the scope is unclear. TCON reduces ambiguity by pricing directly from the architectural documentation and schedules while clearly defining allowances, assumptions and procurement timing at the tender stage.

Tender integrity requires measured quantities, comparable trade quotations for major packages where practicable, benchmark checking against internally maintained rates, and transparent review of inclusions and assumptions with the client and design team. Tenders should not rely on vague exclusions that undermine the architecture.

Variations and change management

Variations are managed through a structured approval process under both contract models. Costs and scope are confirmed in writing, program implications are explained where relevant, approvals are recorded before implementation, and comprehensive records are maintained so site execution remains consistent with approved decisions.

TCON's estimating methodology is intentionally thorough, so most variations arise from client-driven changes, late selections or evolving project requirements rather than from omissions in scope. Regardless of the cause, changes need to be identified, documented and approved in a disciplined way.

Architectural projects run from $1.5 million to $7 million and above. At that scale, the contract model is not paperwork. It decides how risk, cost and trust are shared for a year or more.

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