Construction Methods
The methods of construction can be typically broken down into the following styles:
- Lump Sum is a good idea if the project is going to be bid out to several contractors. A good set of drawings and specifications is required or the amount of change orders during the project will be immense.
- Greatest Maximum Price is good if some design/build elements are present in the project. The contractor will usually have a fixed fee for the profit and overhead and a variable fee for the General Conditions, which includes field supervision, trailer expense, shipping and handling costs, etc.
- Open Book is good for a design/build type of project. The contractor will show all of the subcontractor costs and material costs and then add a markup.
Many owners decide to act as a general contractor themselves and hire the subcontractors directly. This works well if it is an isolated projected, such as a kitchen or a bathroom, but can lead to supervision and coordination problems when attempted on a large project where there are numerous subcontractors. Then it is worth having a jobsite superintendant or foreman to run the subcontractors.
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Green Construction