What does "open book pricing" involve in construction projects?

Open book pricing in construction projects involves a pricing practice in which the contractor shares their detailed cost information with the client. This approach fosters transparency and builds trust between the contractor and the client, allowing the client to understand how project costs are derived.

By providing access to the contractor's accounting records, including labor, materials, equipment, and overhead costs, the client can see exactly where funds are being allocated. This method can lead to more collaborative decision-making, as both parties can discuss potential cost savings and determine the most efficient course of action together. Additionally, open book pricing can help mitigate disputes during the project by ensuring that both parties are in agreement regarding costs.

In contrast, the other options lack the transparency and client involvement that define open book pricing. Some options may suggest established profit margins or historical estimates without the level of detail and cooperative spirit found in open book pricing.