How to read a fixed-price proposal (and spot a vague one)

“Fixed price” should mean the number you sign is the number you pay. In practice, it means that only when the scope underneath the number is complete. A fixed price over a vague scope isn’t fixed — it’s an opening bid.

The four clauses to read twice

• Allowances. A $4,000 “appliance allowance” means the price assumed $4,000 appliances. Low allowances make proposals look cheap and change orders inevitable.
• Exclusions. What the price does NOT include. Short exclusion lists on big projects are a red flag, not a comfort.
• Change-order terms. How changes are priced and approved. You want written orders, priced before work proceeds — never “we’ll settle up at the end.”
• Hidden-conditions language. Fair proposals name what happens when a wall opens on dry rot. Vague ones leave it to a negotiation you’ll have mid-build.

The five-minute test

Take any two proposals for the same project. Ignore the bottom line and count the line items. The longer, more specific document is almost always the cheaper project by completion day — because everything the short one left out is still going to happen. It just doesn’t have a price yet.

You aren’t comparing prices. You’re comparing how much of the project each price includes.