Save time with DocHub and Save General Contractor Agreement in PPR

Aug 6th, 2022
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How to Save General Contractor Agreement in PPR

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the following BL TV program is brought to you by OFlaherty law please enjoy welcome to learn about law my name is Kevin o Flaherty from OFlaherty law and today were going to explain general contractor construction contracts well talk about some of the most important clauses in these contracts and some of the negotiating points and things to consider with these clauses you should be aware that at learned - about - law comm we have an article associated with this video that goes into much more detail with respect to each of these clauses and include some other clauses were not going to talk about but for the sake of brevity were gonna highlight some of the most important parts of that article so first lets talk about the scope of work clause this lays out the work that the contractor is responsible for delivering in exchange for the compensation negotiated in the contract most important thing to consider in the scope of work clause is minimizing ambiguity in order to avoid litiga

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For example, a GMP contract to build a grain silo would include the direct projects hard costs of $150,000, overhead costs of $20,000 and a fee including the contractors desired profit of $15,000 for a total price of $185,000.
52.215-8 Order of Precedence-Uniform Contract Format. (a) The Schedule (excluding the specifications). (b) Representations and other instructions. (c) Contract clauses. (d) Other documents, exhibits, and attachments. (e) The specifications.
A GMP contract differs from a fixed-price contract, such as a lump sum contract, in that, for the latter, the price remains the same no matter how much a contractor spends to complete the project. GMP contracts are more flexiblethe property owner will reimburse the contractor for expenses up to the maximum.
A guaranteed maximum price (GMP) contract is a contract in which the owner or operator of a property agrees to pay their contractor for the cost of a project, plus a fixed fee up to a maximum price.
A GMP contract differs from a fixed-price contract, such as a lump sum contract, in that, for the latter, the price remains the same no matter how much a contractor spends to complete the project. GMP contracts are more flexiblethe property owner will reimburse the contractor for expenses up to the maximum.
Disadvantages for contractors GMP contracts increase contractors financial risk since they are on the hook if costs exceed the maximum price allowed.
Unlike a lump sum contract wherein a contractor is paid a flat fee for the work, the guaranteed maximum price contract allows the owner to potentially save money if the project ends up costing less than estimated.
Using a GMP contract can help customers secure financing more quickly and allow contractors to start the projects right away. It can also allow contractors to start without all the details because the set price limit allows customers to make final decisions on materials and designs as the project develops.

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