Before you sign
Construction contract negotiation for owners
The contract sets how you pay, what a change costs, who owns a delay and what happens if the job goes wrong. We negotiate the price and business terms with your attorney, from a builder’s point of view.
The risk
What a contractor’s standard terms usually favor
The contractor writes the proposal and standard contract, so the defaults favor the builder: high change-order markups, loose allowances, payment on billing rather than progress and soft completion dates.
Terms matter as much as price. With $400,000 of changes, a 20% markup is $80,000 and a 10% markup is $40,000. Osher has worked as a project manager for a general contractor, so he knows where these terms sit in the contract. He negotiates them for you before you sign.
What’s included
What we do for you
Results
What you get
Every concession matched to written scope.
Markups, backup and unit rates agreed before the first change.
Schedule of values and retainage terms that keep payments in line with the work.
How it runs
The process
- ReviewWe read the proposal and contract and mark the risks.
- Term sheetYour positions agreed before anything goes to the contractor.
- NegotiatePrice and terms in writing, your attorney on the legal language.
- Complete the exhibitsSchedule of values, allowances, drawing list and procedures attached.
- Brief the teamA one-page summary of what was agreed.
Deliverables
What you receive
- 01Contract term sheet with recommended positions
- 02Negotiation memo showing price movement and concessions
- 03Agreed schedule of values
- 04Allowance schedule with realistic values
- 05Change-order and payment procedures exhibit
- 06Business-term comments on the draft contract for your attorney
- 07One-page summary of key dates, amounts and obligations
Fixed price or cost-plus: which is better?
A fixed price (stipulated sum) suits complete drawings. A guaranteed maximum price (GMP) suits a design still developing. Cost-plus with no cap puts the most risk on the owner.
What is retainage?
Part of each payment held back until the work is complete, for example 10%. It helps get the punch list and closeout documents finished.
What should an allowance cover?
Items not yet selected, such as tile or lighting, at an amount that matches your actual selections. The contract should say how overages are handled.
Do you replace my construction attorney?
No. We negotiate the business terms and your attorney handles the legal language.
Which contract forms do you work with?
AIA, ConsensusDocs, contractor forms or your attorney’s documents. The terms and exhibits matter more than the form.
Start a project
Have your contract reviewed before you sign
Call (570) 339-7793 or book a consultation. Send us the proposal and contract and we will mark up the business terms.
- A 30-minute call with Osher about your project
- An honest opinion, even if you decide not to hire us
- A written proposal: flat monthly retainer or a percentage of construction value