Time and material has elements of both the unit price and cost plus approach. The owner pays the contractor on the basis of effort expended, but there is no fee as such. An important element of this method is that these labor and equipment costs must include all indirect and overhead expenses, profit and contingency, in lieu of payment of any extra "fee." Such a contract may include a list of hourly payment rates, for carpenters etc., with a premium in normal hourly rates to include indirect expenses and overhead.
The Illinois Time and Material Building and Construction Contract — Owner to Supply Materials is a legally binding agreement used in construction projects within the state of Illinois. This type of contract is designed for situations where the project owner, rather than the contractor, will be responsible for providing the materials required for construction. In this contract, the project owner agrees to supply all necessary materials, equipment, and supplies needed to complete the construction project. The contractor, on the other hand, agrees to provide skilled labor, tools, and other necessary resources for the construction work. The contract outlines the terms and conditions under which the project will be carried out, including but not limited to the duration, payment terms, scope of work, and any special provisions specific to the project. By utilizing the Illinois Time and Material Building and Construction Contract — Owner to Supply Materials, the project owner maintains greater control over the quality and sourcing of materials. This type of contract often proves beneficial in situations where the owner has established relationships with preferred suppliers or has specific materials requirements. There are different variations of this type of contract depending on the specifications of the construction project. Some common variations include: 1. Illinois Time and Material Building and Construction Contract with Cost-Plus Fee: This type of contract includes a cost-plus fee structure, where the contractor is reimbursed for direct costs of labor, materials, and other expenses, plus an agreed-upon percentage or fixed fee for profit. The contractor is entitled to receive compensation for the actual expenses incurred during the construction process. 2. Illinois Time and Material Building and Construction Contract with Not-to-Exceed Cost: In this variation, the contract incorporates a cap on the total project cost. The contractor must complete the project within the agreed-upon not-to-exceed amount, providing a level of cost control for the project owner. 3. Illinois Time and Material Building and Construction Contract with Guaranteed Maximum Price: This type of contract sets a maximum price for the project, providing the owner with more certainty in terms of the overall cost. If the actual costs are lower than the guaranteed maximum price, the owner may share in the contract savings, but if the costs exceed the maximum price, the contractor is responsible for covering the additional expenses. It is crucial for all parties involved in a construction project to thoroughly review and understand the terms of the Illinois Time and Material Building and Construction Contract — Owner to Supply Materials before signing. Seeking legal advice from an experienced construction attorney is highly recommended ensuring the contract adequately protects the rights and interests of both the owner and the contractor involved.
