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Cost Plus Construction Agreement Template for South Africa

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Key Requirements PROMPT example:

Cost Plus Construction Agreement

"I need a Cost Plus Construction Agreement for a large-scale hospital renovation project in Cape Town, South Africa, with specific provisions for maintaining operational healthcare facilities during construction and strict hygiene protocols, with construction planned to commence in March 2025."

Document background
The Cost Plus Construction Agreement is specifically designed for construction projects in South Africa where the final project cost cannot be accurately determined at the outset, or where flexibility in scope is required. This contract type is particularly suitable for complex projects, renovations, or situations where the scope may evolve during construction. The agreement provides detailed mechanisms for cost verification, markup calculation, and project management while ensuring compliance with South African legislation including the Construction Industry Development Board Act, Occupational Health and Safety Act, and relevant building regulations. It includes comprehensive provisions for cost tracking, variation handling, quality control, and risk allocation, making it suitable for both large-scale commercial projects and specialized construction works where traditional fixed-price contracts may not be appropriate.
Suggested Sections

1. Parties: Identification and details of the Employer and the Contractor

2. Background: Context of the agreement and brief description 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 Mechanism: Definition of cost components, markup calculation, and payment structure

6. Contractor's Obligations: Key responsibilities and obligations of the contractor

7. Employer's Obligations: Key responsibilities and obligations of the employer

8. Project Timeline: Construction schedule, milestones, and completion dates

9. Cost Records and Verification: Requirements for maintaining and verifying cost records

10. Quality Standards: Required quality standards and inspection procedures

11. Health and Safety: Health and safety requirements and responsibilities

12. Variations: Process for handling changes to the scope of work

13. Payment Terms: Detailed payment procedures, timing, and documentation requirements

14. Insurance and Securities: Required insurance coverage and performance securities

15. Risk and Liability: Risk allocation and limitation of liability provisions

16. Dispute Resolution: Procedures for resolving disputes between parties

17. Termination: Grounds and procedures for contract termination

18. General Provisions: Standard legal provisions including notices, governing law, etc.

Optional Sections

1. Environmental Management: Required when the project has significant environmental impacts or requires environmental permits

2. Community Engagement: Needed for projects in sensitive community areas or requiring community liaison

3. Design Responsibilities: Include when the contractor has design responsibilities in addition to construction

4. Value Engineering: Include when there's a formal process for cost optimization during construction

5. Handover and Commissioning: Required for complex projects with specific commissioning requirements

6. Maintenance Period: Include when post-completion maintenance is part of the contract scope

7. Materials Sourcing: Required when there are specific requirements for material procurement

8. Subcontracting: Include detailed subcontracting terms when significant subcontracting is anticipated

9. Force Majeure: Detailed force majeure provisions for high-risk or long-duration projects

Suggested Schedules

1. Schedule A - Scope of Works: Detailed technical specifications and drawings

2. Schedule B - Cost Components: Breakdown of cost elements and markup calculations

3. Schedule C - Project Program: Detailed construction schedule and milestones

4. Schedule D - Key Personnel: List of key personnel from both parties and their roles

5. Schedule E - Site Information: Site details, access requirements, and existing conditions

6. Schedule F - Required Insurances: Detailed insurance requirements and coverage levels

7. Schedule G - Forms and Procedures: Standard forms for variations, payments, and other procedures

8. Schedule H - Health and Safety Requirements: Detailed health and safety specifications

9. Schedule I - Quality Management Plan: Quality control procedures and requirements

10. Schedule J - Rate Schedule: Labor rates, equipment rates, and other unit prices

11. Appendix 1 - Performance Security Forms: Templates for required bonds and guarantees

12. Appendix 2 - Payment Certificate Template: Standard format for payment applications and certificates

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



































































Clauses




































Relevant Industries

Commercial Construction

Residential Development

Industrial Construction

Infrastructure Development

Mining

Healthcare Facilities

Educational Facilities

Retail Development

Hospitality

Manufacturing

Renewable Energy

Relevant Teams

Legal

Commercial

Operations

Finance

Procurement

Project Management

Risk and Compliance

Health and Safety

Technical

Construction

Environmental

Quality Assurance

Contract Administration

Business Development

Relevant Roles

Construction Manager

Project Director

Commercial Director

Contract Manager

Quantity Surveyor

Legal Counsel

Risk Manager

Financial Controller

Operations Director

Procurement Manager

Site Manager

Cost Engineer

Project Engineer

Health and Safety Manager

Environmental Compliance Officer

Chief Executive Officer

Chief Financial Officer

Construction Director

Technical Director

Development Manager

Industries









Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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