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A comprehensive guide detailing construction project management, modern contracting practices, and the role of a project manager.

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Construction Contracts: Law and Management

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Construction Contracts: Law and Management

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An essential reference for understanding the legal aspects and management of construction contracts.

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Will Hughes, Ronan Champion, John Murdoch

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The Evolution of General Contracting Practices

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The Evolution of General Contracting Practices

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A research paper exploring the evolution of general contracting practices and modern techniques utilized in the industry.

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Integrated Project Delivery: A Better Way to Build

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Integrated Project Delivery: A Better Way to Build

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An academic article focusing on the integrated project delivery (IPD) method and its benefits for general contracting projects.

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5 Tips for Improving General Contractor Business

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5 Tips for Improving General Contractor Business

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An article providing practical tips and strategies for improving the operations and profitability of a general contracting business.

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10 Key Construction Contract Terms and Why They're Important

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10 Key Construction Contract Terms and Why They're Important

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A detailed article describing the crucial terms and conditions in construction contracts and their significance.

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While talking about construction contracts and their importance may seem like a repetitive topic, it is one of the most important aspects when considering the construction industry and the success of key players. A construction contract is the method by which terms, conditions, and the fine print of a project and agreement are legally bound together. The contract is a solidified deal made between the parties (usually two-the owner and the contractor) involved in the specified project.

The Importance of Construction Contracts

A means to protect the rights of both the client/owner and the contractor, a construction contract typically contains specifications on the definition of the project, the rights and duties for each party, compensation and how it will be distributed, conditions (general and specific), as well as delay terms and other outstanding provisions that are required for to each party to complete the job successfully.

Not only does a contract outline all of the above and more, but it is also a way for the involved members of the project to be held accountable for their end of the deal. A legally and financially binding agreement between the owner and the hired general contractor(s), subcontractor(s), suppliers, and more. Construction contracts are an absolute necessity for any successful business in the industry, and there are four main types of construction contracts primarily implemented depending on the type of project and payment method.

Common Types of Contracts in Construction

Unit Price Contracts

One of the most implemented types of construction contracts is the unit price contract. This price-based contract sums the total price of the project based on each item unit's projected cost. The risk is split more evenly between the contractor and the owner, where the contractor is paid according to the rates for each item in the bill of quantity. The unit price option also allows for more flexible changes in design, as the total cost of the project is still unknown as the project can be started before designs are even finalized.

Lump Sum Contracts

Another price-based contract option, the lump sum contract bases the project total on the total fixed price for all activities. This type of commercial construction contract places almost all of the risk on the contractor as they are the ones who will estimate costs from the plans and factor in additional overhead and profit to determine the total value. This does, however, give them more incentive to finish early and possibly receive a greater profit.

may have incentives and benefits for finishing early and/or under budget, bidding and selection process is easy as only one sum is submitted, and minimal change orders

Cost-Plus Contracts

The cost-plus contract option is when the parties involved have an agreed-upon amount or percentage that covers the builder's overhead on any particular project. The project owner, who assumes the majority of the risk, then reimburses the contractor for the costs incurred plus an added fee, but only after carrying out the work. There are different types of cost-plus contracts, including fixed percentage, fixed fee, and guaranteed minimum price (GMP). This contract is commonly used by government agencies.

Target Cost Contract

The target cost contract method is a blend of measures found in lump sum and cost-plus contracts. A joint effort between both parties on an agreed amount target cost, the contractors are paid based on actual costs plus a certain fee (usually a fixed percentage) of the total cost. Higher risk can be carried by the contractor in the case where project prices can increase in total cost. However, the contractor can also be rewarded with a percentage of savings between the target cost and the actual cost.

How to Determine the Contract for Your Needs

When deciding the type of construction contract for your specific project, it is essential to understand the types of contracts and the possible benefits and downfalls of using each one. Construction contracts are on a complete case-by-case basis, depending on the amount of labor, materials, equipment, and scope of work for the project. Is it also important to assess the risk factors for each party involved that are associated with each contract type-whom do you want the risk to fall on, or do you want it to be a more even split?

At the end of the day, construction contracts are a vital and integral part of making sure projects are completed as fairly and smoothly as possible. They are comprehensive ways to lay out every minute detail of the project, making sure to decrease the risk of costly mistakes on all sides of execution. It also gives the entire team working on the project a framework to work on and work towards, together.

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Types of Construction Contracts: What You Need to Know

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Learn about the different kinds of construction contracts and the pros and cons of each for risk assignment, incentives, flexibility, and oversight.

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The Impact of Contract Terms on General Contracting

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The Impact of Contract Terms on General Contracting

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A case study discussing the impact of various contract terms on the performance and outcomes of general contracting projects.

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A practical handbook offering detailed insights into construction contracts, their formation, and management.

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The Contractor's Guide to Quality Concrete Construction

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The Contractor's Guide to Quality Concrete Construction

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This guide covers best practices in concrete construction and tips for ensuring high-quality outcomes.

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American Concrete Institute, American Society of Concrete Contractors

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An online course covering the fundamentals and advanced aspects of construction management, suitable for aspiring general contractors.

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The Construction Management Industry and Profession

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Offered by University of Maryland, College Park. This Construction Management course prepares you to lead and succeed in one of the ... Enroll for free.

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A comprehensive course designed to equip general contractors with the knowledge to manage and resolve construction claims effectively.

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Construction Claims Management - (9 PDUs)

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Construction Claims Management ... Step-by-step from Definition to Submital.

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Starr General Contracting is your premier choice as a general contractor  in Glen Allen, VA. Renowned for an unwavering dedication to masterfully crafted living spaces, Starr General Contracting strikes the perfect balance between bespoke workmanship and genuinely personalized service. Each project embarked upon, from the blueprint of design & build specificities to the application of the final polish, upholds our commitment to surpass expectations and secure your absolute satisfaction.

Contact us:

Name: Starr General Contracting

Address: 5445 Blue Holly Cir, Glen Allen, Virginia, 23060, USA

Phone: 804-494-4111

Email: starrgc.va@gmail.com

Website: https://www.starrgeneralva.com/glen-allen-va

External links:

https://starrgeneralcontracting.bravesites.com/

https://businessinmyarea.com/profile/starrgeneralcontracting

https://www.diigo.com/profile/starrcontract

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