Before any construction takes place, paperwork comes first. This means that before any construction contracts are signed its important to start exploring the best structure for a Pre-Construction contract. To start with, it should reflect the following 4 Operating Assumptions:
- The client doesn’t want to pay more than they need to for these services.
- The Client is not looking to get any work done for free. If they are, they should simply ask. An honest question should reveal an honest answer between honest people.
- The service provider is not looking to make an underserved profit by pocketing the unspent overages after expenses are paid. They should not be looking to make up a loss on one project by pocketing undeserved profit from another project.
- The Service Provider expects to be paid for all of their time. An honest day’s pay for an honest day’s work. The classic work ethic.
Good design is always an iterative process. The first draft is never published, the prototype is never manufactured. Whether it’s for fountain pens or space shuttles, it’s impossible to know what the project will entail and what its associated Pre-Construction Costs until there are preliminary designs and a preliminary budget. In addition to a Contractual Structure that reflects these 4 Operating Assumptions, here are 4 consumer truths about the Pre-Construction Process.
- In the beginning, there are a LOT of unknowns.
- Service Providers act as they are contractually incentivized to do so
- Its entirely possible to provide a completely transparent accounting for every minute and cost spent on Pre-Construction, but a fixed-cost contract will not require this level of Transparency
- After establishing Project Viability with a preliminary design and a preliminary budget, the client may want to change the design significantly, or simply exit the process altogether.
Some of those consumer truths can seem complicated but the transparency an hourly contract can reveal, gives the 21st century client FAR more opportunities for collaboration; why wouldn’t you want that?
Here’s what I can tell you from 42 years of experience. Buying the empty lot, the house or commercial building was easy. Show up, sign papers. A large construction contract is not that. For many people, this may be the most consumer-choice money they will spend in their lives, and it deserves all the best consumer practices made available in the Marketplace by good software and, most importantly, a well-designed Pre-Construction process.