Time and material has elements of both the unit price and cost plus approach. The owner pays the contractor on the basis of effort expended, but there is no fee as such. An important element of this method is that these labor and equipment costs must include all indirect and overhead expenses, profit and contingency, in lieu of payment of any extra "fee." Such a contract may include a list of hourly payment rates, for carpenters etc., with a premium in normal hourly rates to include indirect expenses and overhead.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.Contrato de Construcción y Construcción de Tiempo y Materiales - Propietario para Suministro de Materiales - Time and Material Building and Construction Contract - Owner to Supply Materials
State:
Multi-State
Control #:
US-01289BG
Format:
Word
Instant download
Description
Free preview
Key Concepts & Definitions
Time and Material Building and Construction: This contract type is commonly used in the construction industry in the United States where the project scope is not clearly defined. Contractors are paid for their actual labor at a fixed hourly rate and for materials at cost.
Step-by-Step Guide
- Initial Consultation: Meet with the contractor to discuss project needs and uncertain components.
- Agreement Drafting: Draft a time and material contract specifying hourly rates and material markup.
- Monitoring and Documentation: Keep detailed records of hours worked and materials purchased.
- Regular Updates: Conduct regular meetings to review expenditures and project progress.
- Final Evaluation: Review complete records and final project to ensure all terms were met.
Risk Analysis
- Budget Overruns: Without a fixed price, total costs can surpass initial estimates, leading to budget overruns.
- Documentation: Requires meticulous record-keeping, failure of which can result in disputes.
- Dependency on Trust: Success heavily relies on the homeowners trust in the contractors honesty and efficiency.
Pros & Cons
Pros:- Flexibility to adjust project requirements in real-time.
- Payments are based on actual work done and materials used.
- Potential for higher costs if not meticulously managed.
- Risks of budget and schedule overruns.
Best Practices
- Clear Communication: Maintain open, transparent communication between all parties involved.
- Detailed Contracts: Ensure the contract includes detailed terms about rates, materials, and handling of unexpected issues.
- Regular Oversight: Regularly audit the work done and materials used to prevent disputes and ensure project integrity.
Common Mistakes & How to Avoid Them
- Underestimating Costs: Always prepare for potential additional costs by setting aside a contingency budget.
- Poor Documentation: Keep detailed records from the start to avoid any potential disputes or confusion.
- Lack of Regular Audits: Conduct frequent reviews and audits to keep everything on track and transparent.
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