Construction Contract Tips: What is your Scope of Work?
After conducting due diligence, the next step in creating a great construction contract is to clearly define your scope of work. The scope of work definition can lead to a lot of frustration if it’s not carefully worded. Simply put, the scope of work should include everything that you are agreeing to do/provide for the project. In other words, it should reflect everything you’ve taken into consideration to complete your bid.
Problems most often arise when the scope of work is vague. For instance, a scope that simply states “remodel bathroom” doesn’t even clearly specify which bathroom is to be remodeled, much less what fixtures are needed, what tile, etc.
Here are a few tips for clearly defining your scope of work:
If possible, incorporate the architect’s plans into the scope. This can be accomplished simply by referencing that the work includes the plans dated xx/xx/xxxx. Be aware, though, that if the plans get changed or revised, you should require a change order (discussed later).
Include written specifications describing the materials to be used.
Specifically list all allowances. Allowances are items that are included in your bid, but whose price is not yet known (e.g., appliances, bathroom fixtures, cabinetry). Instead of a general category such as “appliances,” the scope should clearly identify which appliances are included within the bid.
Specifically list owner-supplied items and any work you will provide with regard to these items. Although owners will often pay for certain items directly, you still incur labor charges in installing these items or supervising their installation. Make sure to account for this work in the scope.
Anything outside the initial scope (whether addition or deletion) should require a change order. Change orders are addressed later in Tip No.6. What needs to be understood here is that a well-defined scope of work should make it easy to determine when a change order is necessary.
At Downs Law, we understand that construction agreements can be confusing -- but they don’t have to be. In our free e-book, we've taken 10 important contract provisions and distilled them into plain, understandable language. You will be able to use these as a guide to determine whether your contract is on solid footing, or whether it needs more attention. And as always, we’re here for you if you need help. Contact us!