Protecting design work to prevent clients from taking your specs to other contractors looking for a better price is an easy fix, according to consultant David Stone. While many contractors face the dilemma of being unsure how to incorporate design work into the construction contract, Stone says simple semantics can prevent any issues.
Stone suggests using language that makes "it financially wise to have you build the project rather than shopping for the cheapest price." Stone advises two paragraphs in the contract that say what the price would be if your firm is retained and not retained to build the job, to ensure you receive payment for the design agreement and work. Stone suggests asking for 4-8% of the potential sales price of the project for the design agreement if the client agrees to retain your services and at least double that price for the client if they choose to walk away from your firm.
When you discuss this [design agreement] with your client, point out the difference and explain that they are essentially getting a cash discount by using their services. If they baulk, there's a good change they intend to shop the job. That's when you decide if you want to continue working with them, or if you want to pack your stuff and head to the barn.
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