As general contractors, we’re in the business of taking on large projects that can span years of work before completion. Long-term projects can only be successfully completed (on time and on budget) with meticulous, thought-out planning.

One of the most helpful tools is the pre-construction service agreement (PCSA). It’s a formal contract between the client and general contractor to outline initial goals and responsibilities until a main building contract is executed. The three main benefits of this contract are the keys to a successful project.

Leverage The Contractor’s Experience

If done right, a PCSA is the best advice a client will receive from the contractor. The service agreement offers the client the opportunity to heed the advice of the contractor, in terms of design development and construction planning, before any major decisions are set in stone. The intention of this agreement is to draw from the contractor’s expertise and make the contractor a part of the project team, aiding the project’s accuracy in planning and pricing.

Recognize Potential Issues

A PCSA removes unknown variables related to a project and reduces risks for the owner. By recognizing any potential issues in the early planning phases, project managers and clients can prepare themselves with the best plans to avoid issues. It’s much easier to make adjustments during the planning process – as it only involves erasing a line and not tearing down a wall. In addition, analyzing risk in advance can save time and money down the road.

Analyze Cost

A large portion of any PCSA is to add up construction expenses, ensuring its total estimate is workable with the overall budget and can be maintained throughout the life of the project. This is also the time to decide which payment approach will best fit the project. Not every construction project has the same needs in terms of payment methods. Whether the project team decides on a lump sum fee or weekly rates, it is a conversation that will need to be addressed early on. A PCSA can help do that.

Every construction project, public and private, has a main building contract. But if a developer or client wants a higher level of planning, then a pre-construction service agreement is an effective option. For leveraging expertise, ruling out potential issues and estimating construction costs, a PCSA creates smart, prepared clients and successful projects.