Cost-plus moves the risk of the unknown from the contractor to the client: the client pays what the job really costs, plus a fee, and in exchange gets to see every receipt. It suits work that can't be priced up front, such as a renovation behind old walls or a custom build with selections still open. Its whole viability rests on documentation. A cost the contractor can't show a receipt for is a cost the client can refuse.
A worked number
Cost plus 18%. Documented costs for the month: $31,400 in materials, subs and crew labor. Invoice: $31,400 plus $5,652 fee, $37,052. If $2,100 of the crew's receipts never made it into the file, the contractor eats $2,100 of cost and forgoes $378 of fee, and the client never knows there was a dispute to have.
The mistake it hides
Treating the fee as the margin. The fee has to cover overhead first; at 18% on cost and a 20% overhead rate, the net is thin. It also hides how much administration cost-plus creates: monthly statements, receipts attached, a client who reads every line. Contractors who price cost-plus like fixed price, without that work counted, lose money on paper they can't produce.
In Obra
Every cost on a project carries its receipt, its date, its category and who confirmed it, which is exactly the file a cost-plus client is entitled to. Export the period's costs and the invoice is the export plus the fee. The receipt tracking guide is the habit that makes the file complete.