A flexible construction contract – with firm control over time and cost
TOPTICA EAGLEYARD's new location required a highly technical fit-out on a tight schedule – while parts of the planning were still evolving. We developed and negotiated a Cost + Fee general contractor agreement that provided the flexibility to move the project forward while maintaining control over the two critical parameters: time and cost.
The client.
TOPTICA EAGLEYARD develops and manufactures high-performance semiconductor laser diodes for demanding applications. Its new location therefore had to accommodate not only office functions, but also technically sophisticated laboratory and production areas.
What the matter was about.
Following the lease of its new location, TOPTICA EAGLEYARD had to convert and fit out the building for its specific office, laboratory and production requirements. The project combined demanding technical specifications with a tight schedule.
The relocation of TOPTICA EAGLEYARD’s technical equipment had to take place within a defined window because of specific climatic requirements. A delay in completion could therefore have had consequences well beyond the construction project itself.
At the same time, not every detail of the fit-out could be finally planned and priced before construction needed to begin. A conventional fixed-price structure would therefore have provided limited flexibility or required substantial risk premiums.
We prepared the first draft of the general contractor agreement and developed a Cost + Fee structure under which the contractor is reimbursed for defined actual costs plus an agreed fee. To maintain cost control despite this flexible model, the agreement combined open-book transparency with a Guaranteed Maximum Price.
The challenge was to create a contract that allowed the project to move quickly without giving up control over either the completion date or the overall cost.
How we worked
The process, step by step.
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Contract Structure
Development of the contractual framework for a technically demanding fit-out.
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First Draft
Preparation of the first draft of the general contractor agreement tailored to the project and TOPTICA EAGLEYARD's requirements as employer.
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Cost + Fee Model
Development of an open-book remuneration model based on reimbursable actual costs plus an agreed contractor fee.
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Cost Control
Combination of the flexible Cost + Fee model with a Guaranteed Maximum Price and clear rules on reimbursable costs, changes and payment.
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Schedule Protection
Contractual mechanisms designed to secure the project schedule and the completion date required for TOPTICA EAGLEYARD's relocation.
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Negotiation & Finalisation
Negotiation with the general contractor and ongoing refinement of the commercial and technical interfaces through to finalisation.
Flexibility where the project needed it. Control where it mattered.
The resulting general contractor agreement combines the flexibility of a Cost + Fee model with clear mechanisms for cost and schedule control. TOPTICA EAGLEYARD can move the technically demanding fit-out forward without having to freeze every planning detail before construction begins.
At the same time, the open-book approach, defined reimbursable costs and Guaranteed Maximum Price provide a clear framework for controlling the overall project cost. The contractual schedule provisions address the equally critical requirement that the new location be ready in time for the planned relocation of the technical equipment.
The result is a construction contract tailored to the realities of the project: flexible enough for an evolving technical fit-out, but structured around the two parameters that were critical for TOPTICA EAGLEYARD– time and cost.
FAQ
Questions on this kind of work.
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How much does legal advice on a general contractor agreement cost?
The cost depends on the scope and complexity of the project, the contractual structure and the extent of the negotiations. We usually work on an hourly basis and provide a cost estimate before starting. Where the scope of work can be clearly defined, we can also agree on a fixed fee.
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When can a Cost + Fee model make sense for a construction project?
A Cost + Fee model can be particularly useful where construction needs to start before every technical detail has been fully planned or priced. The contractor is reimbursed for defined actual costs plus an agreed fee. To maintain cost control, the model should be combined with clear rules on reimbursable costs, transparency and, where appropriate, a Guaranteed Maximum Price.
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Does Cost + Fee mean that the employer has no cost certainty?
No. The level of cost certainty depends on the contractual structure. Open-book requirements, clearly defined reimbursable costs, approval mechanisms and a Guaranteed Maximum Price can provide substantial cost control while preserving greater flexibility than a conventional fixed-price model.
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How can a construction contract protect a critical completion date?
Where completion by a specific date is essential to the wider project, the schedule should be treated as a core contractual requirement. This may include binding milestones, reporting and coordination obligations, consequences of delay and clear mechanisms for dealing with changes that affect the programme.
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