Working through CE material, and one of the flashcards lists Cost-Plus (T&M) as affecting:
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Quality of the work
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Likelihood of claims brought by the contractor
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Frequency of change orders
After cross-checking AHPP 17.4 and 16.1, I think these characteristics actually belong to Stipulated Sum, not T&M. Posting to see if I’m missing something.
1. “Claims brought by the contractor” — logic points the other way
In T&M, actual costs are reimbursed automatically. The contractor doesn’t need claims to recover costs — they’re already being paid for them. Weak incentive for GC to claim. Instead, the owner may have a lot of reasons to question the legitimacy of GC’s spending. More claims, if so, should come from the owner rather than the contractor.
2. “Frequency of change orders” — same logic
The whole idea of T&M is to adapt to project changes. Scope changes are absorbed in real-time reimbursement. A CO isn’t strictly required for the money to flow — actual costs are billed as incurred. Why would T&M lead to more COs?
3. “Quality of the work” — AHPP says the opposite
AHPP 17.4 lists T&M as the preferred method when “construction quality or special construction requirements are more important than cost, such as in defense projects or research facilities.” AHPP literally positions T&M as the quality-first choice. The flashcard implies the opposite.
It appears that the characteristics of Stipulated Sum were pasted onto the T&M flashcard. Would love to hear how others have reconciled this with AHPP.