Wright has experience with every type of project delivery method and contract types. Here are examples of common contract structures:
Cost Plus Contracts (also known as Guaranteed Maximum Price)
There are multiple variations of Cost Plus and Guaranteed Maximum Price Contracts. An advantage with this contract format is that the Owner is afforded the opportunity to utilize our expertise and services during the Pre-Construction Phase while achieving competitive pricing and quality for the Construction Phase.
Public projects can use an alternative contract type called Lease-leaseback. This provides owners with more control over quality, opportunity for early contractor involvement in cost estimates, value engineering, constructability, investigation of existing conditions, staging and scheduling. This leads to a more successful project through a spirit of teamwork and cooperation. In essence the contract follows the Guaranteed Maximum Price model and has less paperwork and liability than a hard bid.
Time and Material
Time and material contracts are usually preferred if the project scope is not clear, or has not been defined. The owner and the contractor must establish an agreed hourly or daily rate, including additional expenses that could arise in the construction process. The costs must be classified as: direct, indirect, mark-up, and overhead. Sometimes the owner might want to establish a cap or specific project duration to the contractor that must be met, in order to have the owner’s risk minimized.
Stipulated Lump Sum (also known as a hard bid or fixed price)
This type of contract involves a total fixed priced for all construction related activities. Lump sum contracts can include incentives for early completion, or penalties called liquidated damages, if project goes beyond the agreed schedule. Lump Sum contracts are used when a clear scope with a defined schedule and exact drawings and specification are set with no expected changes.