DESCRIPTION OF FORMS INCLUDED WITH THE CONTRACTOR’S LEGAL KIT
Bid/Proposal: The Bid/Proposal template may be used with owners who want a written estimate, but where contractor is not quite sure if it is worth taking the time to fill out a contract quite yet. There is no signature line for owner to sign the Bid/Proposal and it is not intended to be, nor is it a binding written contract in and of itself. However, once owner advises Contractor that owner wants contractor to do the work, contractor can then choose the appropriate length fixed price/lump sum contract form to fill out and give to the owner.
Contract/Proposal: The Contract/Proposal template is the shortest agreement in the Contractor’s Legal Kit and may be an appropriate template for use on smaller sized projects. It addresses some of the risks faced by contractors. It may be used either as fixed fee agreement or altered to be used as a time and materials agreement.
Short-Form Fixed Price Agreement: The short-form fixed price/lump sum agreement template may be appropriate for use on smaller sized projects by contractors where the work is being performed on a fixed price/lump sum basis by contractor.
Long-Form Fixed Price Agreement: The long-form fixed price/lump sum agreement template is more appropriate for use on larger projects. It has additional language to help identify many of the risks a contractor faces on larger projects (remodels and new construction) and clarifies how to handle many variables that can, and sometimes do arise on larger projects where the work is being performed on a fixed price/lump sum basis by contractor.
Cost-Plus-Percentage-Fee Agreement: The cost-plus-percentage-fee agreement template (also referred to as a time and materials contract) provides the owner with the opportunity to pay only for the actual contractually defined “cost of the work”, plus a contractor's fee that is calculated as a percentage of the contractually defined direct actual job costs. This percentage varies but is typically in the 10% to 35% range depending on the size of the job, your company's overhead, the number of other contractors bidding the project and how much the contractor wants the work.
Cost-Plus-Fixed-Fee Agreement: The cost-plus-fixed-fee agreement template provides the owner with the opportunity to pay only for the actual “cost of the work”, plus a fixed lump sum fee covering the contractor's profit and overhead. The contractor has no financial incentive to increase project costs because the contractor is not paid a percentage of these higher costs unless the scope of the work significantly increases in which case there is a clause for an additional contractor fee.
Labor-Only Agreement Fixed Price Agreement: The labor-only agreement template is one in which the contractor furnishes only labor, no materials and charges a fixed lump sum fee for labor.
Labor Only Hourly Cost Plus % Fee Agreement: The Labor Only Hourly Cost Plus % Fee Agreement template is one where the Owner pays for materials and the contractor charges hourly for his labor and also charges a Contractor’s fee calculated as a percentage of the contractually defined direct job costs. This percentage is typically in the 10% to 35% range depending on the size of the job, your company's overhead, the number of other contractors bidding the project and how much the contractor wants the work.
Estimating Agreement & Pre-Construction Services Agreement: The estimating and pre-construction services agreement template allows a Contractor to charge for time spent estimating a project where it is not yet clear whether or not the contractor will be awarded the contract to build the project and the contractor doesn’t want to spend countless hours bidding the project for free. On many projects a contractor can’t get paid for bidding, but on some projects a contractor may be able to get paid for estimating project costs and this template may be useful.
Design-Build Preconstruction Services Agreement: There are many ways to approach a design-build customer. Some contractors may want to start off with a "Preconstruction Services Agreement" template that covers the design aspects of the project and compensates the contractor either on an hourly basis or fixed price basis for design work only. Then, if the owner and contractor have worked together successfully during the design phase, the contractor can follow up this initial agreement with a construction agreement for the construction phase of the project after the scope of work is completely detailed and the owner is ready to sign a contract. The Design-Build Preconstruction Services Agreement template allows the contractor to charge for the initial design time while working up plans, specifications and pricing for the design build customer without entering into a contract for the construction phase of the project when construction plans and specifications have not yet been developed.
Design-Build Agreement: At the point in time when the design-build contractor has been given sufficient design criteria from the owner that it is possible to accurately commit to a fixed price contract amount to cover the owner’s design criteria, the contractor may then wish to provide owner with a Design-Build Agreement that covers both design and construction. If, on the other hand, the design-build contractor is reluctant to commit to a price for the construction phase of the project based solely on owner’s design criteria before all the construction details are known and developed by Contractor, the contractor may wish to simply start out with the Design-Build Preconstruction Services Agreement and then enter into a subsequent fixed price or cost plus contract with the owner that covers the construction phase of the project.
Project Management Agreement: The project management agreement template may be used where the Contractor wants to act as project manager rather than general contractor and have the Owner pay project costs directly with the Contractor charging in several different possible ways for project management work.
Short-Form Subcontract Agreement: This short-form subcontract template can work well when working with subcontractors the contractor has known and worked well with over an extended period of time. This short form subcontract template covers many of the basic clauses typically included in any subcontract without being overwhelming to your subs.
Long-Form Subcontract Agreement: The long-form subcontract template contains several expanded and additional clauses that give potential added contractual protection to the general contractor. It is well suited for larger jobs and jobs with more complicated types of sub-trade work or on jobs where you don't have a good, established working relationship with the subcontractor who will be performing the work.
Subcontractor Information Form: The contractor may want to send a Subcontractor Information Form template to new subcontractors when plans are given out to bid. Contractor can also send it to regular subcontractors to get their tax identification numbers, and to inform them about current insurance requirements.
Subcontractor and Supplier Bidding Checklist: The Subcontractor and Supplier Bidding Checklist template provides a simple way to organize and compare prices from subs and suppliers. Most categories on the form also contain notes that remind you about some common ambiguities with specific types of subcontractors and suppliers. These ambiguities are important to address and clarify before you rely on any subcontractor prices quoted. Again, as with all the forms, fine-tune this form to suit your specific needs and experiences.
Change Order Form and Accounting Summary (long form): This change order form template keeps the owner (and yourself) informed and constantly updated on how the financial status of the project is affected by change orders and is a critical part of the contractor's job. Nothing shakes the owner's confidence (or the contractor's bottom line) quite like not knowing just how much money the owner has paid toward contract payments and different change orders, and how the original contract amount has been affected by numerous change orders. This includes both increases and deductive change orders (those that result in a credit to the owner). This change order template also has lines to track additional project time.
Change Order Form (short form): Basic change order form template for additional work and changes in the work. This change order template also has lines to track cost and additional project time.
Change Order Contingency Fund Information Form: This informational form template may be given to Owner with a blank copy of contractor’s change order form at contract signing before the project starts. Contractor may want to review the change order form explain to the owner that some change orders are to be expected on practically every job. You may want to explain they typically arise as a result of owner upgrades or betterments, work caused by concealed conditions unknown to the contractor at the time the agreement was provided to the owner, items specifically excluded from the agreement by the contractor which are later required or requested to be performed, or errors or omissions in the design documents prepared by the owner’s architect or designer. This form explains these things, and more so the owner has a better idea of what to expect during the construction phase.
Long-Form Construction Invoice: This long form invoice template is both an invoice and an accounting summary that is very helpful for projects that contain lots of change orders. The invoice will help contractors separate and keep track of payments made by owner towards contract work and change order work so that you always know what the payments from the owner were allocated towards.
Short-Form Construction Invoice: The short-form invoice template is useful for small jobs with only a few payments where no accounting summary is needed.
Estimating Worksheet: Many contractors have estimating programs, but if not, the simple Estimating Worksheet template helps the contractor to remember various kinds of job costs and may be set up by contractor in a spreadsheet program. Most items on the form are listed in the general sequence in which they come up on the job (e.g., permits, foundation, framing, finish, etc.). Remember, this is only a sample form template. Add to this template any additional categories of labor, materials, equipment, and miscellaneous costs that are frequently used on your jobs.
Pre-Construction Conference Form: You may want to use a pre-construction conference form template on larger projects. Present the form to the owner at the meeting where they will be signing the contract -- the pre-construction conference -- and have them review and sign this form at the same time. The purpose of this form is to assure that important aspects of the project and the accompanying paperwork have been reviewed by the owner and the contractor prior to the signing of the construction agreement. In addition, it has clauses that establish some ground rules for job-site procedures and logistical details, such as safety on the site, work hours, use of a job-site sign and photos for advertising in social media, storage of tools and equipment and bathroom access. Some of these clauses may seem nit-picking, but with remodeling, they cover issues that come up on almost every job site and which, if not addressed before work begins, can lead to unnecessary tension and misunderstandings between the contractor and the owner.
Customer Information Form: Remodeling: This is a simple informational form template that describes the common high and low points that occur during the course of a residential remodeling project can help owners better prepare for and cope with what lies ahead. When the builder/remodeler informs the owner about these things in advance, it's less of a surprise when the framing goes fast and is exciting, but the rough plumbing, electrical, mechanical, drywall, painting, finish woodworking, flooring, and countertop stages may seem to take lots of time. This form also tells the owner that doesn’t vacate during construction that his normal lifestyle will be disrupted to some degree as a result of disorder, dust, temporary loss of the driveway or utilities, and other inconveniences created by every remodeling project. Realistically preparing the owner up front for these typical conditions may help later when tensions rise over inconveniences that invariably occur despite the builder/remodelers best efforts.
Optional Contract Clauses: This is a sample material price escalation clause template that a contractor may want to insert in certain agreements to hedge against the volatility of sudden material price increases. There is a sample Cancellation of Contract for Convenience Form by Owner clause that addresses owner cancellation of contract when contractor is not in default under the agreement. The Contractor’s Legal Kit forms do not automatically contain these clauses, but if desired, one or more can be added and revised based on contractor’s individual needs along with input and advice from contractor’s attorney.
Punch List Addendum Form: The punch list addendum form template can be filled out by contractor at end of the project to identify the punch list items that the contractor and owner agree will bring the project to 100% completion. This can help deter the never ending punch list syndrome that most contractors have dealt with when they run into a challenging or difficult to please customer.
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