Allowances In Construction Contracts
Avoiding Misunderstandings and Disputes
By Arthur F. O’Leary, FAIA, MRIAI
The establishment of cash allowances in construction contracts is a convenient method of allocating construction funds to portions of the work that cannot be specified with sufficient particularity for competitive bidding at the time of contracting. This includes primarily items that have not yet been selected pending the availability of new models or the arrival of updated catalogs. In some cases the owner has not as yet established definite criteria for certain equipment or furnishings, but this should not preclude proceeding with general construction. It also includes items of superficial or decorative nature that will be selected at a later time when colors, textures, furniture, and interior designs are more definitely established.
The types of purchases most frequently encountered as cash allowances are those such as finish hardware, lighting fixtures, special equipment, graphics, building signage, floor coverings, window treatment, and wall coverings. It is a flexible way of including in the contract items that are not yet designed, chosen, or specified. Allowances are practical for work of indefinite scope or where the quality, configuration, and other specific characteristics have not as yet been determined.
Technical Articles Archives |
Simpson Strong-Tie Offers Enhanced Steel
Shearwalls, Anchor Tiedown System
Products that offer ease of installation, are backed by extensive testing, and feature high load values and design flexibility can create quite a following in today’s design and construction market. Simpson Strong-Tie, a company known for creating structural building systems, has recently introduced products touting these benefits and much more.
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Ainsworth Introduces OSB Concrete-Forming Panel
Until recently, oriented strand board – commonly known as OSB – was seldom used for concrete forms. Even though the engineered wood product has become a fierce competitor to plywood for floor, wall and roof panels in the residential homebuilding market since the early 1990s, OSB had yet to make its mark in the formwork market. However, Ainsworth – an international manufacturer and supplier of engineered wood products -- recently introduced the Pourform-OS™ concrete-forming panel, which is set to change perceptions of OSB for concrete applications.
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Modular Building: The Time and Cost Efficient Approach to Construction
When evaluating building options, two of the most important considerations are cost and time. Many designers and builders are attracted to the accelerated construction method, as it not only yields a faster time to occupancy but also offers significant flexibility and financial benefits over the life of the building. Methods using modular components decrease the design and construction timeline by 30 to 50 percent, with fewer change orders, earlier occupancy and improved cash flow.
While accelerated construction techniques are not exactly new (according to Architectural Record, they have been used since the 1960s), modular building has become an increasingly popular method, with tremendous strides in construction technology and design innovation since the 1990s. Recent data from the Modular Building Institute (MBI) indicates the commercial modular industry is a $5 billion business annually, with a revenue growth rate of about 6 to 9 percent per year.
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Construction Cost Trends for 2008
The housing slump continues; declines of almost 20% persist. Still led by
hospitality, the commercial sector posted double-digit gains in 2007, but could
not offset the dramatic downturn in housing. Public construction seemed to
be the savior, but now state and federal construction spending is starting to
decrease. This all leads to a 3 to 4% decrease in construction spending as
Trends Archive |
The DCD 2008 Building Square Foot Cost Guide
Design Cost Data™ magazine includes a Building Sq. Ft. Cost Guide in each issue. These square foot cost guides have been assembled from projects in our database, the
DCD Archives™ online at DCD.COM. These guides are provided to the industry by DCD as a benchmark for future building costs.
DCD Cost Guides
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|Case Studies Case Studies Archive|
• Willie Morris Library
• Kenai Peninsula Borough Emergency Response Center
• Main & Garfield Building
• Easterns Automotive
• Old National Bank
• Our Lady of Victory K-8 School
• Rowenhorst Student Center, Northwestern College
Orange City, Iowa
File: MedicalHoeger House
• The Reading Hospital & Medical Center School of Health Sciences
• Anderson Recreation Center
Anderson, South Carolina
• East Park Community Center
• Ayres-Webster Residence
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