contract penalties & bonuses

[TJ]

Looking for any input on construction manager contract provisions for bonuses and penalties. For example bonus if complete in 7 months, penalty if completed later than 10 months tpye of thing.

Is this normal? Any alternatives?

thanks in advance

[giddonah]

sorry, posted in wrong thread.

[Animal AKA Will]

Hey neighbor! I live out on the Rhode Island border & have worked all over New England.

If you're a "hired gun" aka a contracted construction/project manager, there may be various benchmarks you have to meet. I would bring the contract to a few attorneys specializing in business contracts. I have an attorney, but I also take advantage of getting "free" legal advise from other attorneys. Most attorneys will meet with you once for free to discuss your legal matter. I actually keep a database of attorneys so I don't try to use the same attorney twice for free.

I had a contract offered to me that knocked my pay by 4% per month if the project was not completed at the end of 18 months and 5% bonus for each month completed ahead of schedule. It did not include any provisions regarding "acts of God; permit delays; labor issues {strikes or delays in the customer/contractor signing a contract}; material issues; lost time due to accidents. I crossed off various line items; added other line items with red ink & submitted it to the GC for "revisions". Needless to say they never called me back. They did go through 2 construction managers before hiring a company called Macomber to complete the management of the project. The best I could tell it took around 21 months to complete.

Had I taken the project the way the original contract was written I would have been screwed in months 19, 20 & 21 by the 4% factor. The pay structure was monthly invoicing of $7200 for 18 months for a total of $129,600. If I went into month 19 my $7200 monthly invoice would be cut by 4% of the total contract $5184. Ouch. On the other hand had I completed the project in 16 months the 5% of $7200 for 2 months would have been $360 a month or a whopping $720 bonus.

[TJ]

Thanks for the reply Will

So it sounds like you weren't in love with those provisions....I can see why. What do you think would have been fair? What would motivate you with out insulting you?

I expect to do the job I am hired to do but I also understand people wanting to protect thier interest...and I have no p[roblem with getting paid extra for going the extra mile

TJ