This Cost Plus Contract template sets forth the terms of an agreement between a
tenant, and a construction manager for the "fit-out" of a tenant space within a building.
This document in its draft form contains numerous of the standard clauses commonly
used in these types of agreements, as well as optional language to allow for
customization to ensure the specific terms of the parties' agreement are addressed. Use
this form when a construction manager is "fitting-out" the space of a tenant within a
building.
COST PLUS CONTRACT
STANDARD FORM OF AGREEMENT
BETWEEN _____ AND
CONSTRUCTION MANAGER
AGREEMENT Made as of the __ day of ___, 20__ [Instruction: Insert date.] between _____,
[Instruction: Insert tenant name.] a duly formed _____, [Instruction: Insert state and type
of entity.] with a principal place of business located at _____ [Instruction: Insert tenant’s
principal place of business address.] (the "Tenant") and _____ [Instruction: Insert
construction manager’s name.] a duly formed _____, [Instruction: Insert state and type of
entity.] with a principal place of business located at _____ [Instruction: Insert construction
manager’s principal place of business address.] (the "Construction Manager"), for services in
connection with the project described on attached Exhibit A hereto and made a part hereof (the
"Project"), including, without limitation, the following: _______ [Instruction: Insert brief
project description, more full description to be attached.]) at _____ [Instruction: Insert
building address.], a building of approximately ____ [Instruction: Insert brief description of
building, including approximate square footage.], owned by _____, [Instruction: Insert
name of building’s owner.] hereinafter referred to as the "Landlord".
The Tenant and the Construction Manager agree as set forth below:
1. The General Conditions estimate for the project is as per the attached Exhibit B hereto
and made a part hereof dated _____ [Instruction: Insert date.] (the "General Conditions
Estimate"). The Architect/Engineer for the Project are: _____ [Instruction: Insert names and
addresses of any architect/engineer involved in the project.].
2. The CONSTRUCTION MANAGER accepts the relationship of trust and confidence
established between him and the Tenant by this Agreement. He covenants with the Tenant to
furnish his best skill and judgment and to cooperate with the Architect/Engineer in furthering the
interests of the Tenant. He agrees to furnish efficient business administration and
superintendence and to use his best efforts to complete the Project in an expeditious and
economical manner consistent with the interest of the Tenant.
A. The Construction Manager and the Tenant, and the Architect/Engineer called
the "Construction Team" shall work from the beginning of design through construction
completion. The Construction Manager shall provide leadership to the Construction
Team on all matters relating to construction.
B. Extent of Agreement: This Agreement represents the entire agreement
between the Tenant and the Construction Manager and supersedes all prior negotiations,
representations or agreements. When Drawings and Specifications are complete, they
shall be incorporated herein by amendment to this Agreement. This Agreement shall not
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be superseded by any provisions of the plans and specifications and may be amended
only by written instrument signed by both the Tenant and the Construction Manager.
3. Definitions: The Project is the total tenant fit out and associated infrastructure and
improvements to be performed under this Agreement. The Work is that part of the Project that a
particular Trade Contractor (or Construction Manager's own forces) is to perform.
A. The term "day" shall mean calendar day unless otherwise specifically
designated.
B. The term “Contract Documents” shall mean this Agreement, Drawings,
Specifications, addenda issued prior to execution of this Agreement, the other documents
listed in this Agreement and written modifications issued after execution after this
Agreement. In the event of a conflict among the Contract Documents, the Contract
Documents shall be construed according to the following priorities:
First: Modifications
Second: This Agreement
Third: Addenda
Fourth: Drawings - As per attached Exhibit A
Fifth: Specifications
4. The Construction Manager will perform the following services under this
Agreement in each of the two phases described below.
Design Phase (A part of the Construction Phase as pertains to cost outlined in Exhibit B).
A. Consultation During Project Development: Schedule and attend regular
meetings with the Architect/Engineer during the development of conceptual and
preliminary design to advise on site use and improvements, selection of materials,
building systems and equipment. Provide recommendations on construction feasibility,
availability of materials and labor, time requirements for installation and construction,
and factors related to cost, including costs of alternative designs or materials, preliminary
budgets and possible economies.
B. Scheduling: Develop a Project Time Schedule that coordinates and integrates
the Architect's/Engineer's design efforts with construction schedules. Update the Project
Time schedule on a monthly basis, incorporating a detailed schedule for the construction
operations of the Project, including realistic activity sequences and durations, allocation
of labor and materials, processing of shop drawings and samples, and delivery of
products requiring long lead time procurement. Include the Tenant's occupancy
requirements showing portions of the Project having occupancy priority.
C. Project Construction Budget: Prepare a Project budget as soon as major
Project requirements have been identified, and update periodically for the Tenant's
approval. Update and refine the budget on a monthly basis for the Tenant's approval and
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advise the Tenant if it appears that the Project Construction budget will not be met and
make recommendations for corrective action. The Construction Manager will evidence a
good faith effort to provide his service within the budget outlined in Exhibit B.
D. Coordination of Construction Documents: Review the Drawings and
Specifications as they are being prepared, recommending alternative solutions whenever
design details affect construction feasibility or schedule without, however, assuming any
of the Architect/Engineer's responsibilities for design.
E. Construction Planning: Recommend for purchase and expedite the
procurement of long lead items to ensure their delivery by the required date
F. Make recommendations to the Tenant and the Architect/Engineer regarding
the division of Work in the Drawings and Specifications to facilitate the bidding and
awarding of Trade Contracts, allowing for phased construction and taking into
consideration such factors as time of performance, availability of labor, overlapping trade
jurisdictions, and provisions of temporary utilities.
G. Review the Drawings and Specifications with the Architect/Engineer to
eliminate areas of conflict and overlapping in the Work to be performed by the various
Trade Contractors and prepare pre-qualification criteria for bidders.
H. Develop Trade Contractor interest in the Project and as working Drawings
and Specifications are completed, take competitive bids on the Work of the various Trade
Contractors. After analyzing the bids, recommend to the Tenant that such contracts be
awarded after Tenant approval. Exceptions to the Bid process may be required so as to
meet the Project schedule via negotiation with key Trade Contractors.
I. Equal Employment Opportunity: Determine applicable requirements for
equal employment opportunity programs for inclusion in the bidding documents.
Construction Phase
A. Project Control: Monitor the Work of the Trade Contractors and coordinate
the Work with the activities and responsibilities of the Tenant, Architect/Engineer,
and Construction Manager to complete the Project in accordance with the Tenant's
objectives of cost, time and quality.
B. Maintain a competent full-time staff at the Project site to coordinate and
provide general direction of the Work and progress of the Trade Contractors on the
Project.
C. Establish on-site organization and lines of authority in order to carry out the
overall plans of the Construction Team.
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D. Establish procedures for coordination among the Tenant, Landlord,
Architect/Engineer, Trade Contractors and Construction Manager with respect to all
aspects of the Project and implement such procedures.
E. Schedule and conduct weekly progress meetings at which Trade Contractors,
Tenant, Landlord, Architect/Engineer and Construction Manager can discuss jointly
such matters as procedures, progress, problems and scheduling. Construction
Manager shall publish meeting minutes and distribute copies of same to all applicable
parties.
F. Provide regular weekly monitoring of the schedule as construction
progresses. Identify potential variances between scheduled and probable completion
dates. Review schedule for Work not started or incomplete and recommend to the Tenant
and Trade Contractors adjustments in the schedule to meet the probable completion date.
Provide summary reports of each monitoring and document all changes in schedule.
G. Determine the adequacy of the Trade Contractors' personnel and equipment
and the availability of materials and supplies to meet the schedule. Recommend courses
of action to the Tenant when requirements of a Trade Contract are not being met.
H. Physical Construction: Provide all labor, materials, construction equipment,
tools and subcontract items which are necessary for the completion of the Project which
are not provided by either the Trade Contractors or the Tenant. Construction Manager
shall supervise the Work of all Trade Contractors and Construction Manager's own
forces, and shall use good faith efforts to coordinate such Work with the work of any of
Tenant's separate contractors, so as to complete the Project in a manner which will meet
the Project Schedule and the Project Budget.
I.