Construction Project Management Contract Agreement

Construction Project Management Contract Agreement

From the owner`s perspective, contracts are also important to prevent Scope Creep and reduce the risk of cost overruns that they may have to absorb unexpectedly. Here is a complete list of the types of construction management contracts that are often used. When the scope of a construction project and its complete requirements and expenses are unknown, costs and contracts are often used. These agreements set a surcharge for the actual costs, both for the work and for the materials incurred during a construction. This supplement is the client`s gain. While the formula for the mark-up is agreed as part of the contract – usually in the form of either a percentage of the actual costs or a fixed fee – the final costs are determined on the basis of the actual work. Costs plus contracts may also provide for a minimum ceiling on expenses or fees. Another type of contract that is used when the exact scope of a construction is unknown at the beginning is a time and material (T&M) contract.

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