We often find ourselves sitting across the table from prospective clients answering many questions regarding the structure of the anticipated agreement. We talk through the various contract types with the client and inevitably the dialog turns to “how do we move ahead from here?”
We explain that our preferred method to advance is a process called a negotiated contract. In a negotiated contract the client chooses Groza as their builder early in the process based on interviews, references, and other merit based factors.
Upon selection we author a simple preconstruction agreement between Groza and the client that outlines an hourly fee structure for our firm to prepare a schedule of values (bid or pricing estimate), value engineering solutions (cost savings ideas), help with permitting issues, and in some cases to act as a liaison between the out of town architect and the local professional subs. Groza works for you in whatever capacity is needed to pull together a successful “on budget” start.
At this point the owner and Groza terminate the pre-construction agreement and enter one of several different types of construction agreements (this discussion shall be tackled in another blog).
One might think that this arrangement would scare off most clients based on the conventional wisdom that, “you must get three bids before building”. In fact, it doesn’t, and ultimately three quarters of our projects track this way with great client satisfaction.
In the original post, Groza also reprints “Building Contracts: Bidding vs. Negotiated Contract” by Mark Asher, AIA (Asher Associates Architects, January 2010), which argues that a negotiated contract saves time and money and sets up a partnership instead of an adversarial bid. Read the full article on the original post.
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