Most clients only think about their interior design contract once, right before they sign it. By then, the pricing model has usually already been decided by the company they are working with, and the terms can feel more like paperwork than a real choice. Understanding how an interior design contract is actually structured, particularly the difference between a bill of quantities (BOQ) approach and a cost-plus arrangement, changes that. A BOQ provides a detailed, itemized basis for pricing quantities of work and agreed rates. When used within a fixed-price or fixed-rate arrangement, it can give clients greater budget certainty, while changes outside the agreed scope are typically handled through variations.
Many interior design and fit-out projects use one of these pricing models, sometimes blending elements of both. Understanding the difference gives clients a way to ask better questions before committing a budget to a renovation, fit-out, or new-build interior.
The rest of this article breaks down what each model includes, how the pricing is calculated, and which approach may suit different types of interior projects.
Understanding Interior Design Contracts and Pricing Models
An interior design contract does more than set a price. It defines what is being built, who is responsible for which decisions, how changes get approved, and how disputes are avoided later. The pricing model sitting underneath that contract shapes almost everything else about how the project runs day to day.
Interior design and fit-out projects can be priced using different contractual structures, including BOQ-based and cost-plus arrangements. A BOQ provides a measured basis for pricing defined work, while a cost-plus structure involves paying actual project costs along with an agreed fee.
Clients comparing quotes from different companies sometimes assume they are comparing like-for-like when in fact they are comparing two different pricing approaches. A lower number on a cost-plus proposal is not necessarily a lower final cost, and a higher BOQ figure is not automatically less flexible than it looks. The interior design and fit-out process a company follows, from concept development through execution, can influence which pricing approach is suitable for the project.
What Is a BOQ Contract?
A BOQ-based contract uses a detailed, itemized breakdown of the quantities and types of work involved in a project. The way those quantities and rates affect the final contract price depends on the specific contract structure.
What a Bill of Quantities (BOQ) includes
A bill of quantities lists measurable items of work in a project, such as materials, labor, finishes, fixtures, and installation tasks, with each item broken down into a specific quantity and unit. A BOQ is generally prepared from drawings and specifications once the design has developed sufficiently for the required work to be measured.
For an interior project, that could mean a line for square meters of porcelain flooring, another for linear meters of custom joinery, another for the number of light fittings, and so on through the defined elements of the scope.
Because the quantities are measured in advance, a BOQ is most useful when the design and specifications are sufficiently developed to support accurate measurement. More detailed design information can therefore make the pricing process clearer and reduce uncertainty around the defined scope.
How pricing is calculated
Each line item in the BOQ carries a unit rate, and the rate multiplied by the quantity gives the cost for that item. The priced BOQ can then form the basis for the contract sum, interim payments, and the valuation of variations, depending on the contract terms.
How the scope is defined
The scope in a BOQ is defined by the contract documents, including the BOQ, drawings, specifications, and other relevant documents. If an item or requirement is not properly covered by the contract documents, questions can arise about whether it is included in the agreed scope.
This makes accuracy at the design stage important. A BOQ prepared from incomplete drawings or an unfinished material schedule may lead to more variations later, reducing some of the budget certainty that a well-defined pricing structure can provide.
What Is a Cost-Plus Contract?
A cost-plus contract bills the client for the actual cost of labor, materials, and subcontracted work as the project proceeds, with an agreed fee added on top.
How the cost-plus model works
Instead of pricing a fixed list of quantities in advance, a cost-plus arrangement reimburses the contractor for verified project expenses as they occur. Cost-plus arrangements are often structured as open-book agreements, giving the client visibility into invoices, supplier quotes, labor costs, and other reimbursable expenses, depending on the terms of the contract.
This approach can be useful when the design is not fully locked down at the time the contract is signed or when a project is expected to evolve significantly once work is underway.
Actual project costs + agreed management/profit margin
The client pays for actual project costs plus a fee that covers the contractor’s overhead and profit. That fee can be a fixed percentage of costs or a fixed lump sum agreed at the outset.
The contract should clearly state what counts as a reimbursable cost and what is already covered inside the management fee. Clear definitions help both parties understand how project costs will be calculated throughout execution.
How pricing can change during execution
Because the final number is not fixed at signing, the total project cost in a cost-plus arrangement can move as the work progresses. Some cost-plus agreements include a guaranteed maximum price (GMP) or another cost-control mechanism, which can limit the client’s financial exposure while retaining some of the flexibility of the cost-plus structure.
Without a cap or other agreed cost controls, the client carries more of the financial risk if project costs rise above the original estimate.
BOQ vs. Cost-Plus: What’s the Difference?
The two approaches differ across five practical dimensions that matter to anyone comparing proposals.
- Pricing structure: A BOQ provides a detailed basis for pricing the project using measured quantities and agreed rates. Depending on the contract structure, the final price may be fixed or may be adjusted through variations or remeasurement. A cost-plus contract bills actual costs plus an agreed fee, so the final figure can change as the project progresses.
- Budget certainty: A BOQ-based arrangement can provide greater budget certainty when the quantities, rates, scope, and contract terms are clearly defined. Cost-plus arrangements allow the final cost to change as actual project expenses change.
- Flexibility for changes: Cost-plus contracts generally accommodate changes more smoothly because pricing is not tied to a fixed list of quantities. BOQ-based arrangements typically use a formal change order or variation for work outside the agreed scope.
- Transparency: Cost-plus arrangements can provide visibility into actual project costs, depending on the contract’s reporting and open-book provisions. BOQ arrangements provide visibility into the agreed quantities and rates, while underlying supplier costs and margins may not be disclosed.
- Risk allocation: When a BOQ is used within a fixed-price or fixed-rate arrangement, more pricing risk may sit with the contractor, depending on the contract terms. A cost-plus contract generally places more cost fluctuation risk on the client unless the agreement includes mechanisms such as a guaranteed maximum price or other cost controls.
Advantages and Limitations of a BOQ Contract
A BOQ-based arrangement can give clients a clearer view of the defined scope and how individual items contribute to the project cost.
Knowing the priced quantities and rates makes it easier to review a proposal, compare different tenders using the same measured scope, and plan against the project’s budget. It can also provide a useful basis for valuing variations and interim payments during construction.
The trade-off is flexibility. If a client decides midway through the project to change a material, reconfigure a layout, or add a scope item that was not included in the original documents, that change may require a formal variation, additional pricing, and approval before the work proceeds.
For clients who have a well-developed design before construction begins, this process can provide a clearer framework for managing the agreed scope. For projects where the design is still evolving, additional changes may require more frequent adjustments to the pricing.
Advantages and Limitations of a Cost-Plus Contract
A cost-plus contract’s main strength is how well it can accommodate a project that is still being shaped after work has already started.
Because pricing is tied to actual costs rather than a fixed list of quantities, clients can adjust materials, add scope, or respond to conditions uncovered during execution without having to reprice the entire project as a fixed scope. This can make the model suitable for complex renovations, older properties with unknown site conditions, or projects where design and construction are progressing in parallel.
The limitation is that this flexibility depends on strong cost transparency and active oversight. Clients need clear, itemized invoices, a defined process for approving costs before they are incurred, and enough involvement to track spending against their expectations as the project moves forward.
Without those controls, a cost-plus project can move further from the original budget than either party intended.
Which Interior Design Contract Is Right for Your Project?
The choice usually comes down to how developed the design is, how clearly the scope can be measured, and how much budget certainty the client needs before construction begins.
When a BOQ model makes more sense
A BOQ-based approach can suit projects where the design, materials, and finishes are already defined in detail, and where the client needs a clear pricing framework to plan around.
Standard apartment fit-outs, office interiors with a settled layout, and projects where the client wants the scope clearly documented before construction can benefit from this approach.
For projects that require detailed design development before execution, StroV’s Design House service covers the design stage and project documentation needed to develop the project before execution.
When a Cost-Plus model is more suitable
A cost-plus contract can fit projects where the scope is likely to change, where the property has unknown conditions that cannot be fully assessed until work begins, or where the client wants to make material and layout decisions progressively rather than finalizing everything before signing.
Once the design moves into execution, StroV’s Fine Finishes service supports the delivery stage of the interior project.
Questions clients should ask before signing
- Is the total price fixed, or will it be confirmed as the project progresses?
- What happens if I want to change a material or layout after signing?
- Is there a cap on cost-plus pricing, and what happens if costs exceed it?
- What counts as a reimbursable cost versus something already covered in the management fee?
- How are variations priced, and how quickly are they approved?
What Should Every Interior Design Contract Clearly Define?
Regardless of which pricing model is used, a well-written interior design contract should leave no ambiguity about five things.
Scope of work should describe exactly what is included, room by room where relevant, so both sides share the same understanding of what “complete” looks like.
Materials and specifications should be documented with enough detail, including brand, model, finish, and grade where relevant, so substitutions cannot happen without the client’s knowledge.
Payment terms should set out the schedule of installments or draws and explain how payments relate to project milestones.
Change orders should have a clear process: how a change is requested, how it is priced, and how it is formally approved before work proceeds.
Timeline and responsibilities should state the expected completion date, along with which party is responsible for delays caused by each side, whether that is a late material delivery or a late design decision from the client.
A contract that leaves any of these areas unclear can create disagreements later, regardless of whether the project is priced using a BOQ or cost-plus arrangement.
Working With StroV: Building Transparency Into Every Project
StroV works across both phases of an interior project, starting with Design House for concept development and documentation. Developing the design in detail before execution pricing is finalized can help provide the information needed for a more accurate BOQ.
Execution then sits with the Fine Finishes service line, so contract terms, whether structured around a BOQ or a cost-plus approach, can be considered against a design that has already been developed rather than negotiated separately from it.
This approach can help clients understand how the pricing structure relates to the project’s scope and design before execution begins.
If you are planning an interior design or fit-out project and want to understand the right approach for your scope, budget, and project requirements, get in touch with StroV to discuss your project and explore the available design and execution services.