Construction Management Contracts and Fees Percentage
Understanding construction management contracts and fees percentage are essential when teaming up with a contractor to perform home improvements.3 min read
Updated November 10, 2020:
Understanding construction management contracts and fees percentage are essential when teaming up with a contractor to perform home improvements. Making improvements to your home is an excellent way to increase comfort levels and boost energy efficiency. If you are considering some type of construction or remodeling project, whether it be at your home or business, you'll have several decisions to make. First, you'll need to choose a contractor that you want to perform the job for you.
Whenever a construction project is taking place at your home, it can be incredibly time-consuming and stressful. Things can become really chaotic. As a result, you should review any contract agreement before you sign it. When you sign a construction management contract, you are agreeing to pay a set amount for the services you obtain.
What Does the Construction Manager Do?
The manager of the construction company serves as the company's representative. This is the person you contact if you have questions about the project. The goal of the manager is to make sure the project is completed in a timely and safe manner, as well as meeting your quality standards. You don't want to come home one day and find that you have to have the job redone by a different contractor.
The construction manager will oversee all parts of the project. Construction managers are typically needed for commercial projects, not residential projects, but this is not always the case.
Construction manager job duties:
- Hiring workers
- Making sure workers are paid
- Inspecting the quality of the work being performed
- Looking over blueprints
- Reporting to client and supervisor
The role of a construction manager usually involves monitoring the cost of the project in addition to making sure it is completed promptly. If a project manager notices that some part of the construction process is being held up due to a delay, it is his or her responsibility to determine why and come up with a solution. A construction manager will sometimes work with other professionals, like a project manager or an architect.
Should the Manager Have Knowledge of Construction Laws and Codes?
It is of the utmost importance that this type of manager is very familiar with construction laws and any applicable laws and codes. If the project is completed and it is not in compliance with applicable laws and codes, the entire project may have to be redone.
A construction manager will often help when bidding on a project. He or she will take many factors into account when bidding for a job, such as how much it will cost to pay workers and whether or not these workers will need to be any type of per diem. The manager will also be tasked with the role of finding and hiring construction workers on a per-project basis. It is not uncommon for many of these workers to continue working for the manager on different projects, especially if they perform quality work.
If you hire a project manager for your project, this gives you a bit more control over the entire project. State and local governments will usually hire a construction manager when they have a construction project that needs to be completed.
It is important to understand that construction management contracts are different from prime contracts. Construction management contracts have to be carefully created just like any contract, but they must take into account the wishes of any property owners and state regulators. It is not uncommon for construction management contracting to be confused with general contracting, but the two are not the same.
If you were to perform any type of construction management work for a public agency, the agency itself will likely draw up the contract it wants you to sign. The only thing you have to do is sign the contract. However, as stated before, you will want to make sure that you review it very carefully.
What Type of Fee Does the Construction Manager Charge?
Most construction managers will charge a fee of three to five percent of the total project cost. Some will also charge a five percent fee, yet mark their materials and labor up 10 percent, meaning you are actually paying them 15 percent.
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