Cost Structure and Commercial Framework Options

What is the best commercial framework to use for your construction project? The answer depends on you, your project, your time frame, needs, and priorities. At Elkhorn, we want to help find the strategy that best fits you and your project.

Historically, the majority of our projects have been conducted under some type of cost reimbursable basis because so much of our business has been from repeat, satisfied customers. There have been many variations within the framework depending upon whether time, weather, lack of definition, or other factors are the project drivers. It is our intent to track and execute these type of projects just as we would lump sum contracts to ensure that you, the customer gets the lowest total cost.

Recently the market has provided more opportunities for lump sum work. Better scope definition, communication, and known risk allocation can make this a preferred method of contracting. The quantity tracking, scheduling, and productivity reporting required/provided under this framework make us better at knowing ours and your ultimate cost. We strive to bring these disciplines to all of our projects.

Elkhorn considers itself a pioneer in striving to think outside the box and create new paradigms for client contractor relationships. Front end loading with contractor input can substantially improve the process. Our Benchmark program recognizes the benefit of aligning our goals to be shared and common allocating responsibility based on which of us does what best, and finally involving all employees on the project to help solve problems. We have had great success with this kind of innovative commercial framework by incentivizing all parties to work together and be rewarded by sharing the savings. We have found this works best when savings are shared by the client, contractor, and contractor's employees and incentives are permitted for both safety and productivity.

We welcome the opportunity to explore with you all the possible alternatives to find or create the best commercial framework for your project.