By using strong construction agreements throughout the entirety of a project, contractors are not only showing clients that they are professional and know what you are doing, but are also protecting themselves from fraud. Contractors will use many construction documents during the life of a project. Here are some of the essential documents, and how they’re used.
12 Essential Construction Documents
While different construction projects may require specialized documents, there are 12 documents every contractor should use when creating construction contracts.
1. Bidding Documents
Bidding documents are not legally binding. However, these documents do give contractors the ability to state their intentions, expectations, conditions, while also working through some very important questions early in the bidding process.
By establishing these important terms early in the process, you can easily influence how the actual construction contract is written. Further, you can avoid some of the most contentious issues in construction projects such as what to do if there is a weather delay.
2. Construction Contract Agreement
The construction contract agreement is the principal agreement between the parties involved in a project. This is an essential document and should include a detailed description of the project, the contract price, and how payments will be made. It also covers the scope of the project and scheduling.
Additionally, the initial contract agreement should include state-specific information such as contract laws, liens, and insurance requirements, and a list of responsibilities and conditions both parties must follow when processing claims and resolving disputes.
3. Scope of Work
Clearly defining the scope of work for a project is crucial during the bidding process and throughout the construction project. Not only will the scope of work state what is to be done during a project, but it will also include different techniques you can use to complete the job, material information, and other details regarding who is responsible for different portions of work.
4. Construction Schedule
A construction schedule is mainly utilized to keep a project on track and manage timeline expectations. This document may also include reasons why the schedule can be modified or what happens if there is an unavoidable delay.
A construction schedule could address what happens if the required materials cannot be obtained on time or if another contractor cannot complete their work.
Finally, a construction schedule should include necessary components for completing the project, their relative start times, their relationship to other projects, when each project should be completed by, and dates where licensing and building permit certifications are scheduled.
5. General Conditions
The general conditions document states the obligations each contractor will have throughout the construction project. These conditions most commonly include the paying party, determining when payments will be made, sourcing policies, where work will be performed, and deadlines. While not required, this document should also include details regarding how potential disputes should be resolved.
6. Special Conditions
Special conditions are one of the few documents included in this list that may not be necessary. However, if you do choose to utilize special conditions, they would be included as an extension in the general conditions section.
The construction specifications detail the technical requirements of a project. The specifications document will list the initial requirements and then any changes to the technical requirements will be stated under the scope of work section. The specifications document most commonly includes.
- Common standards and best practice
- Material requirements and acceptable material deviations
- Testing and certifications required for project completion
- Techniques and equipment expected to be used
8. Bill of Quantities
A bill of quantities includes all the materials and tools a contractor would need to complete a project. Further, you would have an itemized list of tools, labor, material, and miscellaneous parts, as well as pricing for every item.
9. Cost Estimate
A cost estimate provides a statement of all tools, materials, and labor that a general contractor will need to complete a job and their corresponding prices.
There are two main ways general contractors create this document. The first way is to itemize and then list each cost separately with the total cost included.
The other option available to contractors is a simple lump-sum form that states the cost of the project without any breakdown of cost. In some cases, a cost estimate is combined with the specifications document.
Architectural drawings should be included as they represent the final design of the project and give the contractor and customer something tangible to agree upon.
Aside from the general drawings, you should keep and submit records of the scope, extent, and aesthetics of the project to be completed.
11. Work Orders
When submitting or receiving a work order, you should save this document as you may need to reference it later in the project. The maintenance of these projects ensures that a project stays on task and work is completed properly and on time. Work orders most commonly include client and contractor information, order numbers, expected completion date, and authorizing signatures.
12. List of Construction Insurance Coverage
Insurance—specifically liability insurance—is something every contractor should submit before beginning a construction project. By keeping documentation of your insurance, you will avoid legal issues, protect your employees, and avoid being charged for accidental worksite damage.
You should not only submit insurance documents before you start working, but also keep them on hand throughout your projects.
Learn more: The difference between insurance and bonds
Construction documents help prevent disputes
These documents cover issues from the scope of work to the cost of the project to your company’s insurance coverage — and help you avoid the most common issues with construction contracts. No matter what state or type of work your company specializes in, successful and reputable contractors learn how to use each of the documents in this list.
The complexity of construction documents can vary depending on the type of contract being used, the number of parties involved in the project, and the type project being completed. Construction attorneys can help construction company owners, contractors, subcontractors, material suppliers, architects, designers, and property owners with a wide range of services before, during, and after a construction project.
Further, if you are confused at all about the type of contracts you should use or what to include in these contracts, it is vital to contact a construction attorney immediately.