Owner and Construction Manager Agreement (GMP with Preconstruction Services Option)
Deciding on a Project Delivery Method
When embarking on a construction project, every owner must make decisions. The earliest and most important is the project delivery method – or how the project will be designed and constructed, from pre-construction through post-delivery.
An owner needs to consider multiple factors when making that decision: project size and scope, schedule, risk tolerance, and desired level of involvement. For the owner who’s interested in an alternative project delivery method to the traditional design-bid-build, ConsensusDocs’ 500 Owner and Construction Manager Agreement is a good choice.
An Alternative Approach to Better Project Results
For the owner who wishes to contract with a construction manager, this project delivery method can produce positive project results for all parties involved. This approach to construction projects:
- Promotes collaboration among team’s players.
- Streamlines communication, which reduces delays and cost overruns.
- Provides a higher level of cost control by defining overhead and profit.
- Invites key suppliers to be part of the design process and gets earlier involvement of the trade contractors who will be completing the work.
- Allows for more flexibility in the design and simplifies the submittal process.
When entering into this construction agreement with the owner, the construction manager offers pre-construction services related to scheduling, budget and design, and can also issue subcontracts for fully designed portions of the project before the entire design is done. This construction agreement also locks in a contract amount by giving the owner a guaranteed maximum price (GMP) before the project design is complete. (Parties set the GMP through using this amendment.)
General conditions are an integral part of this construction contract and set forth the rights, responsibilities, and relationships between the owner and construction manager. The agreement also addresses critical construction law issues like:
- Scope of work and execution obligations
- Design delegation
- Worksite conditions
- Differing site conditions
- Contract price
- Permits and taxes
- Payment and payment schedule
- Indemnification (defend and hold harmless against all losses)
- Insurance and bond
- Termination (for convenience or cause)
- Claims and notice
- Waiver of consequential damages
- Dispute resolution and mitigation
- Construction defects
- Choice of law
Additionally, this construction contract can be modified for individual project needs and state law requirements.
Every construction project has its own unique challenges, but with the right delivery method, even the toughest jobs can produce positive results. With a strong team approach, streamlined communication, and owner certainty to meet the budget, ConsensusDocs’ 500 Owner and Construction Manager Agreement is a smart choice for any owner interested in dipping their toes into a more collaborative project delivery method. See sample and purchase options below.Purchase Options