re: Remodelers asking for cost plus on $300k project, How much cost manipulation

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Cost+: Risk is on the owner
Lump sum: risk is on the gc

You can’t have your cake and eat it too. You can’t go cost + and make the gc take the risk.

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Not on estimates. Frick that. The GC gives you an estimate and should over estimate to a degree to where his project comes in on the expected cost.

Now if he quotes $500 for a tub and it goes up to $750 in 6 months that isn’t his fault. But it damn sure is the GC’s risk in estimating the build expense out. If he quotes $15,000 and it’s actually $20,000 for framing then hell yeah he needs to be responsible. Just because it’s cost+ doesn’t mean the GC has zero responsibility for expenses.

What is he charging?

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So what. Your price can't increase any over what the negotiated cost is plus markup. If the price is fair and agreeable, why would you care who gets what money and from where?

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The cost is not negotiated on cost plus projects. You won’t know what the final cost is until the house is finished. The only thing you negotiate is the “plus” or markup.

Cost plus is typically used on projects where you don’t have time to wait for the plans to be completed and the job to be bid out. You need to get started right away and there’s not enough time to get a lump sum bid.

The OP makes it seem like it’s fixed with the $300k in the title, but if it’s cost plus that $300k is anything but fixed.

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Is there a strategy the homeowner can use to mitigate or deter this?

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Only hire someone that has good recommendations that you trust. Lowest bid is rarely the cheapest. Good contractors don't neeed kickbacks from their subs. They make a living on their reputation. So find somoene that you personally know and/or has been doing this for a long time with a good rep.