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Reply to "Any stories of construction costs far exceeding original estimates?"
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[quote=Anonymous]I've seen a few different ways to structure contracts to try to keep costs reined in. These were from friends, not sure how successful they were. - Be transparent about a reserve (say 10%) and offer half to contractor as a bonus if costs are kept in check elsewhere - Incentives for on-time performance and penalties (like covering a rental) if it goes long - Agreement up front about what to do if material prices shift significantly (like 10-15%) in either direction. We interviewed one GC who would absorb the first 25% of any significant increase, but then we were on the hook for the rest. And if prices went down significantly, he got the first 25% before he passed on the savings to us. Seemed fair. [/quote]
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