Curious what is T&M? The time & material (T&M) contract is based on real-time spent on a project and is an hourly basis or man-day rate. T&M is a different approach to a project than using a fixed price model contract. The fixed price contract look less risky; for, you know the aggregate cost of the project before it goes to the next level – development. However, in reality, it’s not beneficial for the employer/owner/investor.
What is T&M
Benefits of a T&M Contract:
The Final Product can be Modified as Needed
In the T&M contract, as the employer/owner/investor, you can get the product modified as you may require. Because of constant changes in products, it’s important to make the necessary changes in the product to suit the needs of the end user. If the work involves developing a product, there is enough scope to adjust the functionality, or simplifying the product.
Because you Finalize the Product, it’s Per Your Will
The investor considers the suitability of the product at every stage. This will make it possible for the contractor to make the product exactly what the investor/employer/owner desires.
It Enables Saving
The employer needs to pay only for the actual project work executed. This will help save time as well as money spent on the project.
A T&M contract allows transparency. The details sent by the contractor with respect to work such as invoices can be easily verified by the employer.
In Which Case Should I Choose a T&M Contract?
If you’re an independent contractor, consider T&M contracts if:
- The project is meant for the long-term and involves dynamic attributes including the composition of the work (design, development, etc.).
- The project scope is not clear.
If you are a client/employer/investor, and going for a T&M contract, consider these carefully:
- Rate – When you’re negotiating a T&M contract, ensure to know the rate in detail. Check if it valid until the close of the contract. If a daily rate is specified, ensure you get the worth of your money. Some personnel such as supervisors need not charge full pay. To economize the cost, make sure they are also in the belt of hourly-payment.
- Check invoices carefully – Review the invoices. Check how many hours each employee is working and charging for their role. You can find that people at the top take the most money.
- Communication – Keep on communicating with the service provider. Get weekly updates on your project. Tally the progress in the project with the additional money you spent.
- Material procurement – If you are familiar with the material required for the project, it is better you buy them because in case the contractor buys them, they pad the cost. The money you save by buying the material yourself can be placed back into the project.
- Change order – T&M contacts don’t mention what to be delivered. Yet, you should play a proactive role – you may have to do some changes. Add more hours; raise the number of team members, etc. Any change you intend to make has to be done by sending a Change Order. The crux of the matter is you should be the decision maker.
So, what is T&M? Time and Material contracts allow you to pay for materials and labor to be done in a certain amount of time. This is different than fixed-labor contracts because those don’t limit to a certain time frame. DataStreet provides solutions to subcontractors in the field for their T&M contracts and any change orders necessary.
A standard building construction project can be divided mainly into five phases. These phases of building construction include: initiation (the start from initially buying and preparing the land), planning the layout of the building, execution of the plan, monitoring and performing and the completion of the project. These phases are explained further in detail below so that you’re able to complete each phase of your project successfully.
Phases of Building Construction
When starting a building construction project, you will have to determine its feasibility by evaluating its pros and cons. In this phase, you will have to consider the objective of your project as it can be an opportunity or a problem for you as a builder. All of the various options and solutions on how to build your project must be considered prior to taking the next steps.
Once the ideas are set, it’s time to begin implementing these into a plan. During this stage, a manager to monitor and control this project has to be appointed, the work groups participating, and the supplies required for completing the project are neededt. The project manager then has to develop a team to move on to the next phase of planning.
In this phase, the project has to be developed in detail to meet its objectives. The project manager’s team will define the work that needs to be done in order to start construction by identifying the resources and strategies to obtain supplies. An outline of the construction plan along with its timeframe and other activities has to be created in this phase for its execution.
The project manager will prepare the budget of the project by considering the estimated costs. This includes the costs of equipment, material and manpower. Today, various software options are available that can help you in scheduling you project to complete a project within its time frame. It can also help in monitoring the progress while controlling the cost of the project. All the things planned in this stage have to be documented in detail so that they can be reviewed repeatedly throughout its execution.
This phase is also known as the implementation phase, since this phase of the project is practically put into performance mode. At each stage of implementation, it is necessary to communicate with the project manager’s team to control its expenses. The heads of all the teams executing the plan will submit their progress report to the project manager so that he can make the necessary adjustments.
In this phase, the performance and progress of the entire project is measured to ensure that the project is running as per the schedule. All the finishing works including woodwork, metalwork and painting, etc. are also monitored at this stage.
The completion phase is when the project manager has to finalize many things including: stopping the supplies, checking the final touches including planting and landscaping as well as cleaning the surroundings and do final inspection of the project before handing over the building to its owners.
The phases of building construction can typically be divided into five phases: initiation, planning, execution, monitoring, and the completion. Next time you’re looking to oversee a building construction project, make sure that you’re well versed with the phases so that you can effectively and successfully complete a project in your allotted time.