How a Professional Services Agreement Can Build Success for You (and Your Clients)

Bidding on construction projects can sometimes feel like a gamble. You pour hours into detailed proposals, only to lose out to competitors, giving away your valuable time for free.

But what if there was a way to get paid for your time and expertise, even before the project starts, and help ensure the client gets exactly what they want? That's where the Professional Services Agreement (PSA) comes in—a game-changer for GCs tired of the endless bidding cycle. Architects and engineers use PSAs all the time, and so can you!

The PSA is an agreement with the client that you sign before you bid a project. The PSA makes bidding a job easier and works better for all parties involved. The benefit to the Client is to build the client to their vision and budget, and the benefit to the general contractor is having a better-planned job and being paid for the time it takes to provide an estimate that includes every aspect of the job from design to materials to finishes. PSAs help clients understand the complete financial picture by itemizing all costs upfront. This means no unexpected expenses, a happier client, and more efficiency on the project!

Why PSAs are a Win-Win:

Develop Comprehensive Specifications: PSAs provide a clear framework for defining the project's specifications, ensuring that all aspects of the design, materials, and finishes are clearly defined and agreed upon by both parties. No more ambiguity, just clear agreements.

Establish Detailed Budgets: By itemizing all anticipated costs, including materials, labor, and overhead expenses, PSAs help clients understand the financial scope of the project and avoid unexpected expenses down the line.

Create Realistic Timelines: PSAs outline a detailed project timeline, setting realistic expectations for the duration of each phase of construction and ensuring that all parties involved are on the same page, including your crew and Subs. This allows you to be much more efficient with scheduling.

Minimize Costly Change Orders: Customers don’t like surprises any more than you do. By establishing clear specifications and budgets upfront, PSAs significantly reduce the likelihood of change orders, which can disrupt the project schedule and increase costs for GCs and Clients.

Enhance Job Site Efficiency: With all project details clearly defined in the PSA, PMs can run job sites and crews with greater efficiency and accuracy, minimizing delays and ensuring high-quality workmanship.

Most residential remodeling and new home contractors jump into projects not knowing the full scope of the project or having a detailed price. In the end, nobody’s happy because the client thought they were getting more for their money, and you’ve spent more than you planned, in money and in time.

Using a PSA ensures all parties are on the same page with the scope of work and the price. Don't let your time and expertise go to waste. Start using the PSA and transform your construction business from bidding blind to building success.

Remember, your time is your most valuable asset. Please don't give it away for free. Contact The Aspire Institute for Contractors to learn more about using a PSA and get paid what you're worth!

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