The Cost Plus Contractor Agreement is specifically designed for construction projects in South Africa where the final cost cannot be accurately determined at the outset, or where flexibility in scope is required. This type of agreement is particularly useful for complex projects, renovations, or situations where the scope may evolve during construction. The document complies with South African construction law, including the Construction Industry Development Board Act and related regulations. It provides detailed mechanisms for cost tracking, verification, and markup calculations, while ensuring transparency in the contractor's expenses and fee structure. The agreement is structured to protect both parties' interests by clearly defining cost categories, approval processes, and audit rights, while maintaining compliance with local labor laws and construction standards.
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1. Parties: Identification and details of the contracting parties (Client and Contractor)
2. Background: Context of the agreement and general purpose of the construction project
3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement
4. Scope of Works: Detailed description of the construction work to be performed
5. Cost Plus Structure: Definition of base costs, contractor's fee/markup percentage, and cost categories
6. Payment Terms: Payment procedures, timing, invoicing requirements, and payment disputes
7. Client Obligations: Responsibilities and obligations of the client, including access to site and information provision
8. Contractor Obligations: Core responsibilities of the contractor, including quality standards and project management
9. Cost Verification and Audit Rights: Client's rights to verify costs and conduct audits of contractor's records
10. Project Timeline: Project schedule, milestones, and completion dates
11. Quality Control: Quality standards, inspections, and approval processes
12. Health and Safety: Safety requirements and compliance with OHS regulations
13. Insurance and Indemnity: Insurance requirements and indemnification provisions
14. Variations and Changes: Procedures for handling changes to scope or specifications
15. Termination: Grounds and procedures for contract termination
16. Dispute Resolution: Procedures for resolving disputes between parties
17. General Provisions: Standard legal provisions including notices, governing law, and entire agreement
1. Performance Guarantees: Required when specific performance guarantees or bonds are needed for the project
2. Environmental Compliance: Include when project has significant environmental implications or requirements
3. Intellectual Property Rights: Necessary when design work or innovative construction methods are involved
4. Subcontracting: Include when subcontractors are likely to be engaged
5. Materials Storage and Security: Important for projects with significant material storage requirements
6. Force Majeure: Detailed force majeure provisions for high-risk or long-term projects
7. Community Engagement: Required for projects with significant community impact or BEE requirements
8. Confidentiality: Include when sensitive information will be shared
9. Design Responsibility: Include when contractor has design responsibilities
10. Financing Arrangements: Required when project involves specific financing structures or requirements
1. Schedule A - Scope of Works: Detailed technical specifications and drawings
2. Schedule B - Bill of Quantities: Itemized list of materials and estimated quantities
3. Schedule C - Cost Categories: Detailed breakdown of cost types and markup structures
4. Schedule D - Rate Card: Labor rates, equipment rates, and other standard costs
5. Schedule E - Project Timeline: Detailed project schedule and milestones
6. Schedule F - Key Personnel: List of key personnel from both parties and their roles
7. Schedule G - Required Insurance: Detailed insurance requirements and coverage limits
8. Schedule H - Health and Safety Requirements: Specific health and safety procedures and requirements
9. Schedule I - Quality Assurance Plan: Detailed quality control procedures and standards
10. Schedule J - Forms and Procedures: Standard forms for variations, payments, and other procedures
Authors
Relevant legal definitions
Clauses
Relevant Industries
Construction
Real Estate Development
Mining
Industrial Manufacturing
Commercial Property
Residential Development
Infrastructure Development
Healthcare Facilities
Educational Facilities
Retail Development
Hospitality
Government Infrastructure
Relevant Teams
Legal
Operations
Commercial
Finance
Procurement
Risk Management
Project Management
Construction Management
Contract Administration
Compliance
Technical Services
Business Development
Relevant Roles
Construction Manager
Project Director
Contract Manager
Quantity Surveyor
Commercial Director
Procurement Manager
Legal Counsel
Risk Manager
Finance Director
Operations Manager
Site Manager
Cost Controller
Chief Executive Officer
Development Manager
Technical Director
Compliance Officer
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