It appears to be a turn-key (not owned by you until finished) Fixed Price contract with Allowances for some items. Allowances are like small Cost of the Work contracts within a Fixed Price contract. These Allowances should be well defined in the contract. I've never known anyone to be responsible for permit fees other than the owner of the project but if the builder owns the project until the end I guess the permit fees would be part of the Fixed Price unless specifically excluded or listed as an Allowance.

The important issues in a cost plus contract are how will the subs be selected and paid and how will the GC's own forces be paid. Overhead is not a cost of the work unless it takes place on site. The difficulty is that few home builders or owners are capable of managing the contract without training. It should not be confused with a Time and Materials contract. Because it can reduce the owner's pricing control, a Guaranteed Maximum Price is often used. A shared Savings feature is another good idea. But because most of the costs are from subs, how the GC writes the sub contracts is critical. For large projects the sub contract work is bid competitively after the GC'S is hired and the owner approves the bidders and picks the winner. This post was edited by Renovator8 on Sun, Aug 11, 13 at 10:57

helenill: May I play devil's advocate here for a moment? Keep in mind that I am totally on YOUR side, but maybe I can help you develop a strategy. You earlier posted this: "But I am still thinking that we need an accounting. I'm drafting an e-mail asking in a very polite way because we need to be able to show what we have in our house if we ever want to sell." Is that the rationale you're going to present to him for why you want an accounting now? Because it's not true and he will know it. The market and a willing buyer will establish the selling price of your home. How many houses are bought without the buyer knowing the price the owner paid for it? A LOT, especially if time has passed and especially if no realtor researches it for the buyer. You do not need an accounting to sell your house; that is NOT a believable rationale. Further, you have all the proof from your cancelled check records of what you paid for the house. Few buyers would ask to see how much you were charged for the nails, the paint, etc. Your GC knows that too. Again, it's a BAD rationale because you already have a summary record sufficient to prove to a future buyer how much you have in the house. Answer the question to yourself: why do YOU want an accounting? (Yes you may be "entitled" to one; yes, most GCs will provide one; that's not why you want one.) Now, separate that answer out and look at it critically. Is it a good rationale in your GCs eyes for giving you one? What you want to find is the rationale that he might be able to accept. And you might not be able to find a good one. You might end up saying just because we'd like to look at a breakdown of what everything cost. It would just be interesting to us to do that. (Do bear in mind that he might be feeling cautious about somehow indicting himself if he's done anything he shouldn't have.) Now, the other part of your strategy is timing. It is everything. Given that you two had words on Friday, an email he gets on this touchy subject of an accounting right now will NOT be well received. He will read into it vindictiveness or anger on your part. So, today/tomorrow is NOT a good time. What is? The point at which you owe him a lot of money. So much money that he won't want to walk away from it. That's the point at which you delay payment and tell him that, just like a bank, you want to get an accounting to date so you can "see where you are" before making any more payments. Be careful with this because absent any provision in your contract, you don't have a legal leg to stand on. And he knows that. But he might, out of some good will or whatever, be willing to cooperate. Myself, before I had any communication with him about this, or paid him anything more, I would talk with an attorney. I don't know what the laws are in your jurisdiction or how case law has been interpreted. Maybe there's a legal argument to be made that he has some obligation even outside of such a provision in your contract. I don't know and you don't know. But even aside from the law, simply as a personal business strategy, this is the point at which I always hire an attorney and tell her what I'm trying to accomplish and discuss strategies that might work, as well as find out exactly where I stand legally. Just to keep myself out of trouble. I've had attys sit down with me and compose an email for me to send and help me make it sound "civilian" rather than "attorney-like." In this case, an attorney can be a valuable consultant as a strategist, even aside from any strictly legal aspects. Holding the money, making a reasonable request (asking him to do you a favor, actually, if it's not provided for in your contract), being polite, controlling your anger, watching your timing. Hiring an attorney. That's about all the materials you have to work with in developing a strategy. But you need one. An email now from an angry customer is not likely to produce the results you want. If you're just angry, and that's your real answer to my earlier question, I'd just try to let it go.

I like to use a Cost of the Work contract with a Guaranteed Maximum Price and a Shared Savings. This is pretty much the standard for large commercial projects since the early 70's. Each trade is bid competitively and the owner chooses the sub and if that price is greater than the lowest one, the GMP is increased by the difference. The owner has cost protection and a chance to save money and the builder has a financial incentive to buy the job out below the GMP. Splitting the savings increases the builder's profit with little effort and no additional cost. I've never found a downside to it. It is usually a good idea to have an architect involved unless the builder is sophisticated enough to administrate the contract. I would avoid any allowances in fixed price contracts or any Cost of the Work contracts with no GMP because you have no cost protection against excessive markups by sub contractors.