New Company - How to mark-up subs and prepare contracts
New Company - How to mark-up subs and prepare contracts
(OP)
I have just started a new civil/site land development engineering company and will be using subs for such things as traffic and survey. I will be marking-up the subcontractors prices and charging that higher fee to the client.
How should my contract for that original service, i.e. traffic engineering be written up? I assume you typically you would hide the mark-up, or is that wrong and do you just reference the subs contract and show the mark-up as a consultant fee or something?
Lastly, if your not disclosing the mark-up, does your contract generally have to state everything found in the subs contract?
I hope this question makes sense, thanks!
How should my contract for that original service, i.e. traffic engineering be written up? I assume you typically you would hide the mark-up, or is that wrong and do you just reference the subs contract and show the mark-up as a consultant fee or something?
Lastly, if your not disclosing the mark-up, does your contract generally have to state everything found in the subs contract?
I hope this question makes sense, thanks!





RE: New Company - How to mark-up subs and prepare contracts
Your terms and conditions of contract need to be complete enough to protect you without adding on the subs' conditions.
RE: New Company - How to mark-up subs and prepare contracts
Make sure your subcontract has the same provisions as your contract with the owner. You may be beholden to a duty of care that your subconsultant is not, or a duty for which you are not being fairly compensated for the associated risk. Especially construction observation. This can be a source of risk that your E&O and thier E&O carrier will both say are not covered if the contracts are not clear and coordinated.
I used the EJCDC and they are coordinated similar to the AIA contract families.
Don Phillips
http://worthingtonengineering.com
RE: New Company - How to mark-up subs and prepare contracts
One last question on this topic. As far as my proposal to my client, for example a traffic study. Should my contract explain the scope in detail, have the same assumptions, same exceptions, etc as the sub-consultants original contract to me has? I do not see a way to reference the subs contract if it contains their original fee estimate.
Thanks
RE: New Company - How to mark-up subs and prepare contracts
Don Phillips
http://worthingtonengineering.com