The Builders' Blueprint

Before signing a commercial general contract, you must cross-examine the terms. If you don't have an owner's representative on your side, you are likely agreeing to clauses that shift risk and inflate margins. Here are the three most common cost traps we uncover during contract audits:

• 1. Ambiguous Change Order Markups: General contractors often write vague clauses allowing them to charge excessive markups on change orders. Ensure your contract binds GC markup to a maximum of 10% on subcontractor costs.
• 2. Allowances Without Product Specifications: When a contract lists "allowances" (e.g., $150,000 for electrical fixtures) without attached detailed drawings, it leads to guaranteed budget overruns. Demand specifications for every allowance item.
• 3. Over-Optimistic Schedule Timelines: If a GC proposes a timeline that does not include wet-weather contingency days or switchgear lead-time buffers, it is a work of fiction. Require a Critical Path Method (CPM) schedule updated weekly.

By identifying these loopholes in the pre-construction phase, you can save hundreds of thousands of dollars before a single shovel hits the dirt. Do not let your GC dictate the financial rules of your development.

Weekly Action Items:

1. Review your active general contract for ambiguous change order markup terms.
2. Audit all allowance items and tie them to exact product specifications.
3. Force your GC to submit a CPM schedule file (not a static PDF timeline) for weekly tracking.

Forward Always.