Construction management agreement template

Navigating construction projects requires a strong legal framework. Central to this is the construction management agreement, which helps project managers, contractors and stakeholders align their goals, responsibilities and procedures.

This article explores what a construction management agreement is, its purpose and how to manage these agreements efficiently using contract management tools like Juro.

What is a construction management agreement?

A construction management agreement is a contract between a property owner and a construction manager who oversees the project on the owner’s behalf.

This agreement details the construction manager’s roles and responsibilities throughout the project’s lifecycle.

Unlike a general contractor, a construction manager acts more as an advisor and manager – providing guidance and overseeing day-to-day operations to make sure the construction project stays within scope, budget and timeline.

What’s the purpose of a construction management agreement?

The primary purpose of a construction management agreement is to establish a clear framework for collaboration between the property owner and the construction manager.

It sets out the expectations for project management, including budgeting, timelines, quality control and compliance with legal regulations.

This agreement aims to mitigate risks, enhance communication and ensure the smooth execution of construction activities, leading to successful project completion.

Who manages construction management agreements?

Construction management agreements are typically managed by construction managers or project managers with extensive experience in the construction industry.

These professionals are tasked with ensuring that the project adheres to planned specifications and resolving any issues that arise during construction.

Construction contract management covers various aspects including cost estimation, vendor negotiation, project scheduling and compliance with safety standards.

Construction management agreement use cases

Construction management agreements are versatile and can be used in various scenarios, including:

• Large-scale commercial and residential construction projects
• Renovation and expansion projects
• Infrastructure development like roads, bridges, and utilities
• Specialty installations requiring unique construction expertise

What should a construction management agreement template include?

An effective construction management agreement template should cover several key elements to ensure comprehensive protection and clarity for all parties involved. These elements of a contract nclude:

• Scope of work: Detailed descriptions of the services provided by the construction manager.
• Project duration and schedule: Key dates and milestones for project phases.
• Compensation and payment terms: Payment schedules, fees, and any performance bonuses or penalties.
• Reporting and communication protocols: Requirements for regular updates and meetings.
• Change management procedures: Processes for handling changes in scope or specifications.
• Termination conditions: Conditions under which the agreement can be terminated by either party.
• Dispute resolution: Methods for resolving disagreements or legal disputes.

How are construction management agreement templates usually managed?

Managing construction management agreement templates typically involves several steps to ensure that the templates are accurate, compliant, and tailored to specific project needs. These steps include:

1. Reviewing and updating templates

Regularly reviewing templates to make sure they reflect current laws, regulations, and industry standards. This means staying up-to-date on legal changes and industry best practices.

2. Customizing templates

Modifying templates for different project types or specific project requirements. This might involve adding or adjusting clauses to address the unique aspects of each project, such as location-specific regulations or particular project complexities.

3. Securing approvals and sign-offs

Coordinating with legal and project management teams to review and approve the templates. This step ensures that all stakeholders agree on the terms and that the templates meet both legal and operational standards.

4. Storing and organizing templates

Maintaining an organized and centralized home for all templates. This means they can be easily retrieved and ensures that the most current versions are used.

5. Training and communication

Training relevant team members on how to use the templates effectively. Clear communication ensures that everyone understands the importance of using the approved templates and adheres to the procedures.

Challenges of managing construction management agreement templates

Some common challenges in managing these templates include ensuring that templates are up-to-date with changing construction laws and standards, and adapting templates to suit diverse project requirements and stakeholder expectations, which can quickly become time-consuming.

And without a streamlined contract creation process, any challenges can result in costly delays to the project start date and completion.

Automate construction management agreements in Juro

A construction management agreement is a crucial component in the successful delivery of construction projects.

With features designed to enhance legal productivity, Juro offers a dynamic solution for automating and managing construction management agreements, with features designed to enhance legal productivity:

• ‍Self-serve workflows – allowing non-legal staff to initiate contracts using pre-approved templates, reducing the bottleneck at the legal department.‍
• AI-enabled contracting – facilitating faster contract cycles with tools for AI-powered drafting, negotiation and collaboration.‍
• A robust contract repository – a centralized platform for storing and accessing all contracts, ensuring easy retrieval and oversight.

By using templates, and leveraging automation tools like Juro, companies can:

• Shorten the sales cycle, leading to quicker revenue realization
• Reduce operational costs through improved efficiency and minimizing errors
• Ensure compliance and timely fulfilment of contractual obligations, such as renewals
• Gain strategic insights into contract management, driving efficiency and growth
• Achieve better project outcomes

Juro’s AI-native contract automation platform empowers all teams to create, agree, execute and manage contracts up to 10x faster than traditional tools. To find out more, hit the button below to book your personalized demo.