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.
A New Jersey Time and Material Building and Construction Contract is a legal agreement between an owner and a contractor for construction services whereby the owner provides the necessary materials for the project. This type of contract allows for flexibility and transparency as it allows for adjustments in the project scope and provides an accurate account of all materials used, labor costs, and project completion time. In this contract, the owner takes on the responsibility of procuring and supplying the materials required for the construction project. The contractor, on the other hand, is responsible for providing skilled labor, equipment, and expertise necessary for the successful completion of the project. As such, the owner retains control over the quality and type of materials used, while the contractor ensures their proper installation. There are various types of New Jersey Time and Material Building and Construction Contracts — Owner to Supply Materials, each tailored to meet specific project requirements and circumstances. Some commonly used types include: 1. Fixed Price Time and Material Contract: This type of contract outlines a predetermined rate for labor and materials. It typically includes provisions for potential adjustments in the contract price due to unforeseen circumstances or changes in the scope of work. 2. Cost Plus Fixed Fee Contract: This contract type allows the contractor to charge the owner for the actual cost of labor and materials, along with an agreed-upon fixed fee for profit and overhead. It offers transparency as the owner is aware of the actual costs incurred during the construction process. 3. Guaranteed Maximum Price (GMP) Contract: This contract sets a maximum price that the owner agrees to pay for the project, inclusive of labor, materials, and any contingencies. If the actual costs are lower than the GMP, the owner benefits from cost savings. Conversely, if the costs exceed the GMP, the contractor is responsible for covering the additional expenses. Regardless of the specific type chosen, a New Jersey Time and Material Building and Construction Contract — Owner to Supply Materials plays a pivotal role in establishing a clear understanding between the owner and the contractor regarding project expectations, cost management, and overall project delivery.
