Imagens das páginas
PDF
ePub

Lump-Sum Contract

There are three main classes of contracts-lump-sum or specified amount, cost-plus, and unit-price contracts.

A lump-sum contract is one in which the contractor agrees to perform all work required by the plans and specifications

[graphic][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small]

Each column represents a month's time, and is divided into halves, thirds, or quarters, to indicate periods of less than 30 days.

for a lump sum. This sum is the amount that the owner agrees to pay the contractor for doing the work, regardless of what it costs the latter. The contractor's profit is the amount by which the sum he receives from the owner exceeds his payments for labor, materials, and other items of cost.

When his cost is greater than the sum paid him by the owner, the excess is his loss in executing the contract.

The lump-sum contract used by some well-known architects and the form of contract adopted jointly by the American Institute of Architects and the National Association of Builders are given in the Appendix (Forms A and B).

The following provisions, which are not listed in the order of their importance, are the main clauses which should appear in a contract:

1. Parties to the contract.

2. Clear description of work to be performed by the contractor, with definite reference to particular plans, drawings, specifications, etc.

3. The sum to be paid to the contractor by the owner and the method for determining and the time for making payments for work performed.

4. Basis for pricing additional work ordered or work omitted.

5. Date when work is to begin and date by which it is to be completed.

6. Conditions under which extensions of time will be

granted.

7. Owner's right to terminate contractor's employment and take over work.

8. Owner's right to retain balances due contractor to cover claims unpaid by contractor and for which owner might become liable.

9. Indemnification of owner against losses arising out of
performance of work (personal injury to workmen and✓
public, property damages, patent infringement, etc.).
10. Period for which work is guaranteed against defective
material and unskilful workmanship.

II. Procedure if work is abandoned by owner.

12. Relation and responsibilities of architect to work, including decisions and interpretation of plans and specifications.

13. Right of owner and his representatives to inspect all work and condemn any because of defective material or unskilful workmanship.

14. Fixing responsibility on either owner or contractor for placing insurance and securing permits and payment therefor.

15. Percentage of the value of the work performed to be retained by owner until completion of entire work by

contractor.

16. Arbitration clause.

17. Contract binding on heirs, successors, etc.

Guaranteed Cost-Plus Contracts

Cost-plus contracts are those under which the sum paid by an owner to a contractor is based on the actual cost of the work to the contractor, plus the contractor's fee, which is either a fixed sum or a fixed percentage of the cost. These cost-plus contracts very frequently contain the contractor's guaranty that the sum of the actual cost and his fee will not exceed a certain specified maximum sum. This may result in the contractor's earning a fee somewhat less than he contemplated when he signed the contract, or he may actually sustain a cash loss because of the cost of labor and materials alone exceeding the guaranteed price.

"Savings" is a term applied to the excess of the guaranteed maximum price named in the contract over the sum of the final actual cost to the contractor and the contractor's fee. These "savings" either revert entirely to the owner, or are divided between the owner and the contractor according to the provisions of the contract.

The main distinctions between the provisions of a lumpsum contract and those of a cost-plus contract are found in the paragraphs referring to the sum to be paid to the contractor for executing the work and those outlining methods of payment. It is definitely stated in the cost-plus contract

that the owner shall pay the contractor the actual cost to him of doing the work, plus an agreed-upon fee, subject to any guaranty as to the limit of the total to be paid.

"Actual cost" is defined clearly in order to indicate exactly what items of expenditure are to be included in cost and what items are to be excluded. Among disbursements to be included are those for payrolls of laborers and mechanics; for the cost of materials, tools, lumber, and supplies; for the cost of equipping and maintaining temporary structures at the site; for salaries of superintendents and engineers; payments made in connection with subcontracts; disbursements for insurance, bonds, permits, etc.; charges for rental and use of construction equipment.

The items of expenditure to be excluded from the cost are generally such expenses of the contractor's main and branch offices as constitute overhead expense. Overhead expense embraces such items as office rent, salaries of executive officers, the cost of accounting and treasury work, stenographic and telephone services, and all expenditures of a similar character.

All cost-plus contracts should contain a provision requiring the contractor to furnish at stated intervals statements of expenditures made and chargeable as cost of the work. These statements should be supported by copies of payrolls, receipted invoices, and other evidences of disbursement.

A cost-plus contract with a provision guaranteeing the maximum cost to the owner is the most equitable contract, provided that proper checking of labor, materials, services, etc., is done at the job by the architect's or the owner's representative, and that the contractor is reliable.

Unit-Price Contracts

Unit-price contracts are those in which individual unit prices are named as the amount the owner agrees to pay to the contractor for each unit of work of that class performed

by him. The number of units of work completed by the contractor is agreed upon by the architect and the contractor from time to time as the work progresses. The ultimate contract price is the sum of the values of the different classes of work done, obtained by multiplying in the case of each class the unit price by the number of units performed.

Contracts for Work

The agreement between the contractor and the owner is generally drawn and signed after being approved by the architect. Two sets of the plans and specifications, also approved by the architect, are likewise signed by both parties for the purpose of clearly identifying the work included in the contract. These sets are generally termed "the contract sets.' The owner retains one set with one copy of the contract, and the contractor the other set with a copy of the contract.

[ocr errors]

As each new contract is secured, the contractor should assign to it an office number, so that all records applying to that contract can be identified. If there are a number of departments in the contractor's organization, the head of each should be informed of the main features of the contract just secured, particularly those which apply to, or affect, the work of his department.

To insure all materials being on the site when the workmen will need them, and to lay out the work in such sequence that the entire job will be completed on the date specified in the contract, a working time schedule is prepared (Form 4), a copy of which should be furnished to each department head, who must plan his work according to the dates given thereon.

The important point is, of course, that the work be completed on contract time, and it is advisable to establish a schedule of dates according to which the job will be completed somewhat ahead of the contract date. If the schedule date for completion were the same as the contract date, the work would

« AnteriorContinuar »