Construction Services Agreement

A construction services agreement is an arrangement between a general construction contractor and a client to provide construction services for their project. A construction services agreement is a signed legal document agreed to by both sides upon the selection of the general contractor through a bidding and vetting process.

In most cases, a construction services agreement binds the contractor to completing the entire construction project during a set period of time and an agreed-upon amount of money (which can be changed if additional work is needed to be done). The construction services agreement does not include arrangements with subcontractors, which are handled by the contractor as part of separate construction services agreements.

The type of services required by the contractor varies by the delivery method selected for the construction project. During the traditional bid process, the construction services agreement covers the amount it would cost a general contractor to build a project, pay its employees and make a small percentage of profit. The estimate covers the cost of items like concrete for the foundation, cables for electrical wiring, flooring, plumbing, carpentry and HVAC (heating, ventilation and air conditioning). In this case, the agreement does not cover the cost of building or project design, as an architect has been hired by the property owner through a separate contract process.

With the design-build process, the construction services agreement is more comprehensive and is more involved. In this process, an architect and general contractor combine as a team and present a building or project design and construction contractor services in one proposal. The design-build process is used by those who believe an architect-contactor team with a past history of working together would be more efficient and, as a result, cheaper than an architect and contractor working together for the first time.

The construction services agreement as part of a construction manager at-risk (CM at-risk) project falls in between the two. The architect is hired separately from the general contractor, but the contractor is involved in the project from the pre-construction process all the way through completion. The estimate comes in the form of a guaranteed maximum price, which covers all services rendered from pre-construction through the building process.

Leave a Comment

Roughneck Definition

Roughneck Definition North American Palladium

The North American Palladium is a mining company whose home office is in Toronto Canada. This company is involved in the exploration of not only Palladium but also, other metals such as, gold, nickel, copper, and platitinum. The company formed in 1968 and was known as...

read entire definition