Why ARG Contracting Builds Every Project on Cost-Plus Pricing
Cost-plus pricing means the homeowner pays the real cost of labour and materials, plus an agreed margin for the contractor, instead of one fixed number set before work begins. For Kelowna homeowners planning a renovation or new build, that means paying for what happens on the job, not for a builder’s guess about what might go wrong. Here’s why ARG Contracting has built its entire business around that model.
The Problem With Hiding Risk in a Fixed Price
Picture two scenarios on the same build. Crews pull out 85 truckloads of bad soil that nobody expected. Or kitchen cabinets were ordered seven months ago, and by the time it arrives, tariffs or inflation have pushed the cabinet package $7,000 over budget.
In a fixed-price contract, the builder has to guess at those risks ahead of time and build a hidden buffer into the number to cover them. ARG doesn’t work that way. The homeowner pays for the 85 trucks because that’s what it took, not a padded estimate for trucks that might never have been needed. And if a cost swings the other way, the client sees that too.
The trade-off works both directions. If the client should only pay for the soil removal that happened, then the contractor shouldn’t eat a $7,000 cabinet increase that came from outside forces either. Cost-plus means both sides share what’s real, instead of one side betting against the other.
What Cost-Plus Looks Like at ARG
Cost-plus isn’t about loosening the budget. It’s about opening it up.
Here’s how ARG breaks it down:
| Step | What It Means |
|---|---|
| Price the project in detail up front | Based on real production rates and past projects. |
| Track what happens on site | Backed by receipts and documentation. |
| Flag the change the moment it happens | Rather than absorbing it into the invoice or hiding it in a change order. |
| Charge one agreed-upon margin | Set at the start and never buried inside inflated line items. |
The client pays for what happens on the project, plus that one agreed margin. No hidden agendas, no betting against each other, no hoping one side comes out ahead of the other.
Every Project Has Unknowns, Renovations and New Builds Included
Renovations and new builds carry different risks, but neither is predictable down to the dollar.
Renovations open up an existing structure, and existing structures can hide existing problems. Old wiring, moisture damage, or framing issues often only surface once a wall comes down.
New builds start with a clean slate, but site conditions, material lead times, design changes, and structural adjustments still show up mid-project. Construction has known costs going in, and unknown conditions waiting on site, and no contract can price out every unknown before the first shovel goes in the ground.
Cost-plus gives both project types a way to handle those unknowns honestly, as they come up, instead of pretending they were already priced in from day one.
Why Not Just Charge More and Call It Fixed-Price?
There’s real margin sitting in fixed-price contracts for a builder willing to price in every possible risk and keep whatever isn’t used. ARG has looked at that model and turned it down.
The reasoning is simple: hiding a built-in buffer to cover errors or inflation isn’t the kind of company ARG wants to run. Showing the client the real margin needed to stay profitable, and charging exactly that, is the standard instead.
To be clear, fixed-price contracts aren’t wrong. Plenty of good builders run that way, and plenty of clients prefer it. It comes down to what a company is built around. For ARG, that’s transparency, not hidden margins.
ARG’s Cost-Plus Approach
Q: Does cost-plus mean ARG has no accountability for the budget?
A: No, the opposite. Cost-plus means the project is priced in detail, tracked as it goes, and communicated openly, so the budget stays accountable to real costs instead of a buried estimate.
Q: Who benefits when costs come in lower than expected?
A: The client does. If something costs less than projected, that savings gets passed along, the same way an added cost gets explained and shared.
Q: Is cost-plus only for renovations?
A: No. ARG applies the same approach to new builds and commercial projects, since both carry unpredictable site conditions and material variables.
Q: What does ARG show the client when a cost changes?
A: What happened, why it happened, and whether it was a cost increase or a reduction. It’s presented as fact, and then both sides move forward together.
Straight Talk Is the Foundation, Not a Slogan
None of this works without trust on both sides. ARG’s approach comes down to one idea: neither the client nor the contractor should be betting against each other. Instead, everyone deals with what happens, together.
That’s the thinking behind ARG’s cost-plus process, and it’s the same standard applied to every Kelowna home renovation and new build ARG takes on.
Ready to talk through your project with a team that shows its numbers? Get in touch with ARG Contracting to start the conversation.
ARG Contracting is a Kelowna-based general contractor building custom homes and large-scale renovations across the Okanagan on a transparent, cost-plus model. Contact ARG to discuss your project.
