The contract that we signed this week was the result of several discussions with Murfreesboro’s city attorney, Craig Tindall. We are a firm believer that a good project starts with a good contract. For the Fire Station #4 contract, it meant discussing items such as self-performed work and how to arrive at the GMP.

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Self-Performed Work
One of the main items we worked on concerned self-performance of the work. Construction Management contracts typically can be set up where the CM works as a constructor or adviser. In a constructor scenario, the construction manager may be able to self-perform work with its own forces. This is usually limited to work that the construction manager has expertise and capability to perform.

For this particular project it made sense for TPC to be able to self-perform work since we have expertise in concrete and carpentry work. The City of Murfreesboro agreed that this experience would be valuable, however it wanted to have assurance that the work would be competitively bid. Working together, The Parent Company and the City agreed that TPC would submit a competitively priced bid package for the self-performed work. The package will be advertised to trade contractors capable of the work and the work will be awarded to the most responsive bidder.

GMP
The Contract that was signed will be for a guaranteed maximum price, or GMP, for the project. The price is not determined at contract signing. Once the drawings progress to a certain point, a guaranteed maximum price will be offered to the Owner. This allows the construction manager to work with the architect during the design or pre-construction period in order to come up with building materials and systems that work with the project budget.

Review
In addition to staff reviews of the contract, we had our insurance agent, Scott insurance  of Franklin, review the insurance requirements for the project, which were in keeping with our current policies.

Defining the Terms of Success
Knowing the provisions of the contract is crucial to the successful delivery of the work. When all parties are on the same page with regards to the contract, the expectation levels are equal, thereby hopefully avoiding future misunderstanding.

-Bob

About the Author:
Bob Sarratt Nashville Construction
Bob Sarratt is Vice President of The Parent Company, and the project executive for Murfreesboro’s Fire Station #4. He will be sharing his insight and experience from his over 33 years in the construction industry. He can also teach you how to kayak in whitewater.