Build-to-Suit on a client owned lot - Fee Structure Options
There are a number of Build-to-Suit Fee Structures that can be implemented between you and your general contractor. Here is a list of the most common and most effective scenarios that Greenside Design has used in the past:
Cost Plus Percentage:
A General Contracting fee is established based on a percentage of construction cost. This process is open book and typically a “3 bid” system is utilized. This means that 3 bids per subcontractor/trade and material supplier are presented to the Client. The bids are reviewed between Greenside and the Client and the best bid is chosen. The best bid isn’t always the lowest bid. There is more risk to the Client of budget over runs using this process than a lump sum contract.
Cost Plus Fixed Fee:
A General Contracting fee is established based on an agreed fixed amount. This process is open book and typically a “3 bid” system is utilized. This means that 3 bids per subcontractor/trade and material supplier are presented to the Client. The bids are reviewed between Greenside and the Client and the best bid is chosen. The best bid isn’t always the lowest bid. There is more risk to the Client of budget over runs using this process than a lump sum contract.
Lump Sum Contract:
A contract is executed which includes construction specifications and general contracting costs in one Lump Sum. This process is not open book, yet it involves the least amount of risk to the Client of budget over runs because a fixed amount is agreed to in the contract. The only way for budget over runs is through change orders to the contract and its specifications. This is generally the most preferred way for most Greenside clients because of the security of a fixed total cost number.
Design-Build Approach:
A one-point of contact approach is utilized from initial design concept to final completion. After a budget is established and an agreement is signed, the client meets with Greenside and Greenside’s team of architects and designers to design, construct, and choose finishes. This process moves forward while Greenside guides the Owner in all areas of construction, selections, and “sticking” to the original budget. This approach creates less “leg work” for the client through-out the building process but generally does not have the cost guarantee of a Lump Sum Contract. This process is similar to Cost Plus a Fixed Fee.
