Common use of Construction Contingency; Subcontract Buy-Out Clause in Contracts

Construction Contingency; Subcontract Buy-Out. Each GMP shall include a preliminary “Construction Contingency” in an initial amount Owner and Construction Manager agree to and set forth in the applicable GMP Amendment. Each GMP Amendment’s Construction Contingency shall be adjusted to reflect net savings (“Subcontract Savings”) and net losses (“Subcontract Losses”) after Subcontracts pertaining to the Work of that GMP Amendment are awarded and compared to the applicable Schedule of Values. Specifically, (a) Subcontract Savings shall be credited to and increase Construction Contingency by the amount of such savings and (b) Subcontract Losses shall be payable out of and reduce Construction Contingency by the amount of such losses. Net increases to a GMP Amendment’s Construction Contingency after all Subcontract Savings and Subcontract Losses applicable to that GMP Amendment are applied (“Net Savings”) shall be separately identified in the applicable Construction Contingency fund and subject to Section 7.8.2

Construction Contingency; Subcontract Buy-Out. Each GMP shall include a preliminary “Construction Contingency” in an initial amount Owner and Construction Manager agree to and set forth in the applicable GMP Amendment. [Note: three to five percent (3-5%) of the Cost of the Work is common.] Each GMP Amendment’s Construction Contingency shall be adjusted to reflect net savings (“Subcontract Savings”) and net losses (“Subcontract Losses”) after Subcontracts pertaining to the Work of that GMP Amendment are awarded and compared to the applicable Schedule of Values. Specifically, (a) Subcontract Savings shall be credited to and increase Construction Contingency by the amount of such savings and (b) Subcontract Losses shall be payable out of and reduce Construction Contingency by the amount of such losses. Net increases to a GMP Amendment’s Construction Contingency after all Subcontract Savings and Subcontract Losses applicable to that GMP Amendment are applied (“Net Savings”) shall be separately identified in the applicable Construction Contingency fund and subject to Section 7.8.2