Successful Interior Projects thru Effective Contract Docs - Contract Negotiation Flashcards Preview

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Flashcards in Successful Interior Projects thru Effective Contract Docs - Contract Negotiation Deck (29)
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1
Q

Contractual agreements have 3 major inter-related elements. What are they?

A

Scope, time & price. All 3 must be delicately balanced

2
Q

What is the scope of a project?

A

It established what is to be accomplished during the project

3
Q

What is the scope of service?

A

It determines how the designer will execute the documents required to achieve the intended result

4
Q

What 4 things are included in the scope?

A

The scope of the project, the scope of service, time and price

5
Q

List the 6 general factors that take part in defining the project scope.

A

The clients stated objectives, construction budget, schedule, design complexity, quality of materials,and existing conditions

6
Q

Energy efficiency, environmental issues , increased productivity, handicap accessibility, code compliance, real estate and financial services, fast track management and facility management are all examples of benefits that your firm can give to the client which would command what?

A

Higher fees

7
Q

3 ways to deal with a client who has a bottom line number for fee payment and will not budge include:

A

Advance payment, handling submissions and billing, and negotiating a limitation of liability clause.

8
Q

Being able to negotiate a larger _______ ________ allows you to reserve your working capital

A

Advance payment

9
Q

How can submissions and billings help you to limit the cost when a client has a bottom line budget number for the fee?

A

A simple one page invoice once a month with no backup which allows less time for paperwork might be able to lower the cost

10
Q

Typical reimbursible expenses include:

A

Out of town travel expenses, long distance phone calls, fees paid for secuing approvals by authorities, cost of reporductions, postage, additional insurance coverage required by the client, expense of renderings and models requested by the client, cost of CAD equipment required by the client

11
Q

What does a limitation of liablity clause seek to do?

A

Limit your potential exposure to a managable fee or some other limit that is more in line with your scope of service

12
Q

What are the 2 contract types typically used in design work?

A

Cost based contracts and Value based contracts

13
Q

What is a cost based contract?

A

The designer charges the client on a basis of how much it costs the firm to perform the service

14
Q

What are 3 types of cost based contracts?

A

Direct labor, Not to Exceed and Percentage of Construction Cost.

15
Q

What is a multiple of direct labor contract?

A

The designer has billing rates for each classification of employee and the fee is established by multiplying the actual salary rate by a pre-determined multiplier intended to cover overhead cost, indirect expenses and appropriate profit. The designer is simply selling hours, not the value of services

16
Q

What is a Not to Exceed contract?

A

It is usually tied to some form of cost based arrangement. On the surface it seems to give the client a convenient way to control the ultimate cost, but in reality both parties generally lose.

17
Q

What is a Percentage of Construcgtion contract?

A

Compensation is not directly tied to the cost of performing the services, but rather to the cost of construction. In times of recession construction costs tend to be artifically low as competition increases and the designer is thereby penalized as a result of conditions he or she does not control

18
Q

What is a Value Based Contract?

A

It’s a contract that recognizes the value of the design professionals services is not necessarily a function of the time or cost to produce the work

19
Q

What is Unit-Price Contract?

A

It is based on the SF of space or some other measurable unit

20
Q

What is a Cost + Fixed Fee Contract?

A

It’s a hybrid arrangement between a cost based and a value based agreement

21
Q

What is a Lump Sum contract?

A

These are the most value oriented agreements because they are aimed at achieving mutual beneficial results from the designers efforts regardless of the time expended

22
Q

What are 2 things a lump sum contract requries?

A

A well defined scope of service broken down by tasks, which the designer must have a reasonable assessment of how much time it will take for each one so that the appropriate break-even point can be determined

23
Q

Ownership of the design should be with the client or the designer?

A

With the designer unless a clause is included that precludes the re-use of your documents on any other project without your permission and the payment of an additional fee or royalties

24
Q

Responsibility for budget and schedule should be ________ with ___________ and _________

A

Shared with designer and client. If the client insists that the designer take responsibility you should insist on having complete authority to make any decisions that may influence these items. Also, in any requirement for client response insert a statement that time is of the essence

25
Q

Approval of shop drawings and construction work may put you in the position of endorsing the contractors means and methods which are not your responsibility. What should this be changed to?

A

Review submittals for design conformance only and to take the appropriate action with reasonable promtness with the client

26
Q

Record drawings are the responsibility of which party?

A

The contractor

27
Q

Compliance with codes and regulations cannot be provided with absolute assurance of compliance, nor can you attest authoritatively that all aspects of the design are in conformance. This should be changed to something like:

A

The designer will use ordinary standards of care of the profession to design all work to comply with applicable codes, ordinances and regulations.

28
Q

Definition of individual responsibilities is the responsibility of whom to set?

A

The designer

29
Q

Some typical terms that you should look for in the contract and try to reword are: All, none, every, best highest, complete, adequate, safe, appropriate, satisfactory, ensure, assure, guarantee, warrant, direct, oversee and control. Why?

A

These words carry a connatation of extremes or imply a promise of performance that is ambiguous or impossible to meet.

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