A Professional Services Agreement (PSA) or Pre-Construction Contract can be one of the most valuable tools you can have as a client looking to engage in construction services.
Here at Berkley Construction Inc, we believe that communication is the key to the success of a project. That’s why we have a multi-tiered estimating system numbered 1 through 5. 1 being the most basic and inaccurate and 5 being a contract number. Each level has a more defined scope of work, and associated costing. We will usually supply up to level 2 without charge and sometimes level 3 if there is an existing set of plans or a returning customer.
Customers often try to get “Bids” at level 1 and 2. These are actually just “estimates,” as without the details there is no way to know what is contained in the scope of work. These professional guesses will vary wildly in cost and detail. Usually, even with a good set of drawings, the estimates will come back much higher than they need to be, or even worse, lower.
Some contractors lowball on purpose knowing that scope is not yet 100% defined and they hope to start work before discussing these inevitable increases. Picture a shrewd (improper in my view) contractor that makes his estimate seem low, but really, they just removed the important quality and service items.
PSA’s serve many purposes and take many forms. One of the most popular is the design due diligence PSA. Look at this PSA as a feasibility study for your project. No plans, no set budget, just an idea; You may not be 100% sure you can pull it off. And you certainly don’t want to spend 10’s of thousands of $$ on plans and engineering to find out if it works.
The design due diligence PSA is a low-cost way to figure out the basics and budget before all the detail and expenses. At the end of this effort, you should have a good scope of work and adequate pricing. At least enough to decide if the budget meets the goals. There is no obligation to move forward with the project or even the contractor that performed the PSA.
How much do PSAs cost?
PSAs can cost as little as $500 and might be nothing more than crawling around under the house or verifying a structural layout, or it may require some digging to expose a footing. Most PSAs though, are more involved/expensive costing $1400 and above, with permitting even more. A PSA may call for some design, meeting with subs, and possibly engineering or even full plan submittals and permitting. In later stage PSAs The designs are done and the effort is on scope definition, who is doing what, with what materials, when, and for what price. Perhaps the 2nd most important benefit is that the GC performing the PSA will meet with subcontractors on site or in an office setting to make sure they are on the same page and have a clear definition of the client’s needs. Most often initial estimates are site unseen and may contain major errors.
Now, to get from Level 3 to 4 and then to the final 5, there is a lot of work that needs to happen on the clients’, designers’, and contractors’ side. One of the worst scenarios is that the proper amount of work is not done at this stage and then issues come up during production causing costly delays. The PSA does not eliminate ALL issues, but it does lay the groundwork for how issues will be addressed. It is critical to get this pre construction work done. Everyone wants to get the hammers swinging, but planning is key to a smooth project once it does start. Imagine enjoying your construction project. Our aim is to make that happen!
Why hire Berkley Construction to help with your PSA?
Our team has several decades of expertise in construction and we have great relationships with our partnered subcontractors. We also totally understand the way that construction was 5 years ago, it was common to ask for free bids from contractors. We have found this was a waste of time and money for the contractor and for the client. The PSA generally does not cover all our effort to create a detailed scope of work, but the investment is still worth it.
How much money can I save by getting a PSA before construction starts?
There are not just cost saving benefits to working with a professional team before the project has started, it can also offer opportunities in design or minor expansion as well as different types of technology that was not considered or even available before. But more importantly, it will give the client and GC the chance to get to know each other and see how they work together.
There are a lot of questions to answer during the PSA. Is the client kind of handy thus allowing them to handle some parts of the work the GC had thought were his to cover? How much supervision does a customer want? Supervisors are expensive, so if the customer wants to pay to have them to be onsite 100% and watch the painters paint, or drywallers hang drywall, then so be it. But these things need to be discussed prior to production. What about weekend work? Access to the home, site security? What are the desired hours of operation? This is also a great time to discuss the billing process, payments, lien releases and other paperwork. At the end of this process you should have a much, much more accurate estimate and maybe even a contract number, and you will see for yourself what working with your GC will be like. At the end of the PSA, you should have in hand a good amount in information and know your contractor and his team well enough to make a final decision.
Ready to move forward with a Professional Services Agreement (PSA) for your next construction project? Contact us
Customers often try to get “Bids” at level 1 and 2. These are actually just “estimates,” as without the details there is no way to know what is contained in the scope of work. These professional guesses will vary wildly in cost and detail. Usually, even with a good set of drawings, the estimates will come back much higher than they need to be, or even worse, lower.
Some contractors lowball on purpose knowing that scope is not yet 100% defined and they hope to start work before discussing these inevitable increases. Picture a shrewd (improper in my view) contractor that makes his estimate seem low, but really, they just removed the important quality and service items.
PSA’s serve many purposes and take many forms. One of the most popular is the design due diligence PSA. Look at this PSA as a feasibility study for your project. No plans, no set budget, just an idea; You may not be 100% sure you can pull it off. And you certainly don’t want to spend 10’s of thousands of $$ on plans and engineering to find out if it works.
The design due diligence PSA is a low-cost way to figure out the basics and budget before all the detail and expenses. At the end of this effort, you should have a good scope of work and adequate pricing. At least enough to decide if the budget meets the goals. There is no obligation to move forward with the project or even the contractor that performed the PSA.
How much do PSAs cost?
PSAs can cost as little as $500 and might be nothing more than crawling around under the house or verifying a structural layout, or it may require some digging to expose a footing. Most PSAs though, are more involved/expensive costing $1400 and above, with permitting even more. A PSA may call for some design, meeting with subs, and possibly engineering or even full plan submittals and permitting. In later stage PSAs The designs are done and the effort is on scope definition, who is doing what, with what materials, when, and for what price. Perhaps the 2nd most important benefit is that the GC performing the PSA will meet with subcontractors on site or in an office setting to make sure they are on the same page and have a clear definition of the client’s needs. Most often initial estimates are site unseen and may contain major errors.
Now, to get from Level 3 to 4 and then to the final 5, there is a lot of work that needs to happen on the clients’, designers’, and contractors’ side. One of the worst scenarios is that the proper amount of work is not done at this stage and then issues come up during production causing costly delays. The PSA does not eliminate ALL issues, but it does lay the groundwork for how issues will be addressed. It is critical to get this pre construction work done. Everyone wants to get the hammers swinging, but planning is key to a smooth project once it does start. Imagine enjoying your construction project. Our aim is to make that happen!
Why hire Berkley Construction to help with your PSA?
Our team has several decades of expertise in construction and we have great relationships with our partnered subcontractors. We also totally understand the way that construction was 5 years ago, it was common to ask for free bids from contractors. We have found this was a waste of time and money for the contractor and for the client. The PSA generally does not cover all our effort to create a detailed scope of work, but the investment is still worth it.
How much money can I save by getting a PSA before construction starts?
There are not just cost saving benefits to working with a professional team before the project has started, it can also offer opportunities in design or minor expansion as well as different types of technology that was not considered or even available before. But more importantly, it will give the client and GC the chance to get to know each other and see how they work together.
There are a lot of questions to answer during the PSA. Is the client kind of handy thus allowing them to handle some parts of the work the GC had thought were his to cover? How much supervision does a customer want? Supervisors are expensive, so if the customer wants to pay to have them to be onsite 100% and watch the painters paint, or drywallers hang drywall, then so be it. But these things need to be discussed prior to production. What about weekend work? Access to the home, site security? What are the desired hours of operation? This is also a great time to discuss the billing process, payments, lien releases and other paperwork. At the end of this process you should have a much, much more accurate estimate and maybe even a contract number, and you will see for yourself what working with your GC will be like. At the end of the PSA, you should have in hand a good amount in information and know your contractor and his team well enough to make a final decision.
Ready to move forward with a Professional Services Agreement (PSA) for your next construction project? Contact us
