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Project Management Agreement


Construction Company:




Project number:


Project name:

This agreement is made this ______ day of ______, 20 __ by and between ___________, hereinafter called the Owners, whose address is _________, and _________, hereinafter called the Project Manager, Contractor's License No. _____, whose address is _________, do hereby agree as follows:

The Project Manager agrees to manage and see to completion in an excellent and substantial manner, the construction of a single family residence (herein called the "Project") for ________________________ upon the real property located at _______________________.

The Project Manager's Roles and Responsibilities are to be as follows:

Pre-Construction Phase

1. Assist in finding a lender;

2. Obtain all necessary permits and handle all interface with the building department (general, grading, electrical, mechanical, plumbing, etc.);

3. Provide a complete materials takeoff (bill of materials) for lumber and framing hardware;

4. Coordinate the bidding process with at least three bids per each major craft;

5. Act as the clearing house for information to bidding subs;

6. Check up on the references of each subcontractor;

7. Assemble presentation to the lender;

8. Provide a detailed cost breakdown sheet for the lender;

9. Develop a critical path time line with completion of the living space targeted for ______;

10. Act as the contractor of record with the lender;

11. Recommend to the Owners the most qualified and reasonably priced subcontractor for each phase of construction based on the bids submitted;

12. Finalize the contract documents with each sub, making sure everything is "spelled out";

13. Develop a list of contract addenda covering areas of payment disbursment, safety, workers' compensation, cleanup, and craftmanship standards.

Construction Phase

Goal: Make sure something progresses on the job site every working day in order to get the _________ into their new home by _________.

The Project Manager will see to it that the Project is constructed and completed in strict conformance with the plans and specifications and that all laws, ordinances, rules, and regulations of the applicable governmental authorities are adhered to. Further, he agrees to:

1. Be the Owners' "eyes and ears in the field";

2. Meet with Owners on a regular basis to review progress;

3. Coordinate all utilities hookups;

4. Coordinate with the geologist and/or soils engineer;

5. Coordinate with the grader;

6. Supervise day-to-day construction, making sure the Project is built as intended by the Owners and the Designer as per plans;

7. Make sure neighbors' property is respected;

8. Ensure subs maintain the highest degree of craftsmanship;

9. Schedule subs and suppliers;

10. Review worker's compensation of each sub--have a Certificate of Worker's Compensation sent to Project Manager by their carrier;

11. Coordinate incidental day labor;

12. Keep track of change orders;

13. Verify lumber and materials deliveries to make sure we get what we ordered;

14. Authorize payment of subs based upon ongoing review of their work;

15. Obtain lien releases;

16. Provide on-site problem-solving with subs;

17. Coordinate with interior designer's installation;

18. Call for and handle inspections and interface with Building Department;

19. Make sure the job site is cleaned on a regular basis (Owners to provide manpower or funds for labor);

20. Insist that all workers maintain the highest safety standards;

21. Pass along to the Owners any discounts the Project Manager is entitled to as a General Contractor without charging any markups.

The Owner's Roles and Responsibilities are to be as follows:

1. Finalize negotiations with a lender and secure the construction loan;

2. Apply for and pay for the General Building Permit. All other permits are to be paid for and taken out by each respective subcontractor;

3. All construction expenses are to be borne by the Owners. The Project Manager is not to be held liable for any unpaid bills;

4. Sign all contracts with each subcontractor upon the recommendations of the Project manager;

5. Clear through Project Manager any work or changes on the project;

6. Maintain an account for incidental purchases (petty cash)--Project Manager will keep track of these expenses;

7. Provide a job site phone upon commencement of rough grading (cost included in the construction loan);

8. Provide a temporary construction field office available to the Project Manager upon commencement of rough grading (cost included in the construction loan);

9. Accept the liability for theft or destruction of building materials;

10. Provide ALL the appropriate insurances (public liability, course of construction, fire, theft, etc.);

11. Provide a chain-link fence around the Project area;

12. File Notice of Completion within (--) days of substantial completion of the Project.

Fee Schedule

In consideration for the above services rendered by the Project Manager, the Owners agree to pay the Project Manager a Base Fee of 10% of the cost of construction, based on the amount of the construction loan, plus, as an incentive to bring the Project in under budget, a Final Draw of (-%) of any unused loan funds that exist when the Notice of Completion is filed by the Owners and all construction budgeted for in the construction loan is completed.

The Base Fee is to be computed based on the total hard construction costs approved in the construction loan, including permit costs, appliances and fixtures. Any soft costs included in the construction loan, such as design, engineering, interior design as well as furniture and drapery costs, are not to be considered in determining the Base Fee.

The Base Fee is to be broken down into installments as follows:

* An initial retainer of $__ to be paid by __________, to cover the first month of pre-construction services.

* A monthly installment of 1/12th of the base fee to be paid on the 1st of each following month up to ___________.

* The final draw is to be paid within 15 days of filing the Notice of Completion, based on the following:

* As a mutually-beneficial incentive to finish the construction in a timely manner and to meet the completion goal stated above, the Project Manager shall receive the full 50% final draw as stipulated above above if construction of the living space is completed to warrant a Certificate of Occupancy from the City by ____________ enabling the Owners to move in by ________.

* If Certificate of Occupancy is not granted by _________, (-%) shall be deducted from the Project Manager's final draw for each (--) calendar day increment beyond _______________.

* If progress is delayed for any reason beyond the Project Manager's control, the time frame for computing the final draw shall be shifted beyond _____________ by the amount of the delay. Examples of such delays include: unseasonably rainy weather, earthquakes, fire, work stoppages and unreasonable delays in city approvals (defined as requests that may delay rough grading beyond _______________).

* Cost overruns, in any particular construction budget category or allowance, made by he Owners during construction that are a result of changes or upgrades not called out in the plans and specs, are not to be considered as part of any remaining construction funds for purposes of determining the final draw.

We hereby execute this Agreement at ______ on ______.


Project Manager: