FAQ.12

Question:

For a construction management project, what contract amount should be used for certification when there are un-awarded trade contracts: budget amount, projected amount, general conditions amount and add the trade amounts as they are awarded by Change Order?

Answer:

The certification is of the amount of work done under the contract being administered. Therefore it is the current contract amount that should be certified against.

With a stipulated sum contract, you certify against the current value of the contract, and adjust the contract value in response to signed change documents as the project progresses. With a construction management contract you certify against the current value of the contract, and adjust the contract value in response to new trade contracts and signed change documents.

Depending on the work done and how quickly the trade contracts are added, it is possible to meet the financial requirements for substantial performance several times during the course of the project, but the building won’t be ready for the purpose intended so substantial performance will not have been achieved until the project nears overall completion.