How many times did you have to alter a structure construction plan because it failed to meet your expectations? Planning as you go along the process may have its perks, but without seeing the full result beforehand, it might not turn out as well as you hope it would. A pre-construction services agreement or PCSA allows you to assess the project in full in its pre-construction phase before proceeding with the main plan for your structure. Know more about this below.
FREE 10+ Pre-Construction Services Agreement Samples
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6. Preconstruction Services Agreement Template
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11. Agreement for Preconstruction Services
What Is a Pre-Construction Services Agreement?
A pre-construction services agreement (PCSA) is a contract that provides an initial outline of a construction project plan’s goals and responsibilities between a contractor and a client. This agreement exists before drafting the main project contract. The PCSA will provide the service details of the plan in full at its pre-construction stage. Whether or not the contractors involved in this phase will continue to the next stage of the plan is up to the client.
Why Use a Pre-Construction Services Agreement
With the growing landscape modernization and the number of businesses preparing to sprout in urban and rural areas, the construction industry is continually growing as it adapts the demands of the economy and its needs. According to Statista, the global construction spending reached $11.4 trillion in 2018 and they’re expecting it to grow to $14 trillion in 2025. However, it’s best to remember that issues cost fortunes as well. According to Gallup, project management fails costs not only a large amount but also cost lives. This is why a PCSA will be beneficial for your construction project. Here are the reasons why:
1. It offers expert advice early on. Because a PCSA demands that the project’s plan come together at the pre-construction phase, it helps the client see the bigger picture of the work. It gets them involved in the job by asking the contractor’s expertise to take on the plan’s blueprint before they proceed to start the main construction process and build the design plan.
2. It examines risks. Through the plan presentation at the start of the project, it’s easier to plot a risk management plan, allowing the construction management and its team to mend these potential threats with precautions to avoid them from happening.
3. It establishes a clear timeline. Instead of second-guessing and changing the timeline estimate a couple of times while the project goes on, the PCSA will help you establish a clear construction timeline based on the discussed project plan. This provides a more reliable time calculation for the job.
How to Make a Pre-Construction Agreement
Here are the different tips to help you make a pre-construction agreement:
1. Identify All Parties Involved
When you begin to write your agreement, start by identifying all parties involved in the contract. Specifying the names that are part of the construction plan is just as important as knowing the terms the contract entails in its document. It’s essential to note if you’re dealing with a private individual, a one-man contractor, or a company. Naming the right parties allows for identifying which roles are responsible for certain responsibilities and which should shoulder the accountability in case something occurs. Because your document variety is a service agreement, it’s even more important to label who will perform the different services for a construction project.
2. Outline the Services
The outline of service is your PCSA’s highlight because it provides you with a complete list of services that every party in the business agreement should know. This clause in your document should be thorough and detailed in providing information about the services because this will be the basis for the project’s scope of work. If you’re a service provider, this part will help you demonstrate to your client what your offer entails, so they’ll deter from asking beyond the boundaries of your agreed services. This also helps set up the client’s expectations of the results. If there are extra services that are not on the outline, you can include a clause that demands extra work fees.
3. Address the Payment Terms
In any translation, money issues are fragile. They often cause rifts between parties and even between long-time partners in the field. If you’re in the construction industry, a financial-related issue over business contracts can taint your name and keep you in a bad light. This is why your PCSA should include a detailed presentation of its payment terms. This can include downpayment fees, price quotations, budget plan, and anything to do with the project’s finances. More than having a clear picture of the expenses, adding a payment schedule on this clause helps ensure that the client delivers their payment obligation promptly.
4. Discuss the Termination Clause
Every agreement treads a certain timeline and will eventually end after it has served its purpose. However, agreement termination, even before the pre-construction schedule expires, is a common occurrence in transactions. The reasons vary from clashing opinions of the different parties to the irresponsibility of some of its members to carry out its duties. Your agreement should consider this possibility and include a termination clause. This clause should note what incidences or situations result from contract termination and the different steps of the termination process.
What are the different stages of a construction plan?
The different stages of a construction plan are:
- Design generation
- Construction Closing
What are the different pre-construction services?
The different pre-construction services are:
- Initial schematic designing
- Assessing engineering works
- Making an initial budget plan
- Making an initial schedule
- Examining the responsibility matrix
What is a pre-construction property?
A pre-construction property is a structure that hasn’t been build yet and is still in its development phase.
Building a property entails numerous risks and opportunities for failures. It can also incur great losses on both the general contractors and its team, as well as the client seeking their services. A PSCA reduces these risks with an initial plan for how the project will turn out and how it will manage its development. If you’re looking for a pre-construction agreement template for this purpose, we have tons of great selections for you. Download now!
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