Can anyone explain "site conditions" fee?

We are beginning to talk with contractors here in California about a residential construction project. They all estimate their fees essentially the same way...about 15% of build for markup, and another 5% for "site conditions". However, I've yet to get a clear explanation of what this 5% actually covers. Is it to maintain the site in acceptable "condition"...ie safety, trash, etc.? Or is it a contingency fund to absorb any unnexpected conditions found on the site during course of construction? If it's the latter, what costs are it supposed to covered?

Or, finally, is it just a euphamism for another contractor fee?

Thanks for your insights! dg

 

dglaze,

it is the contractors you are talking to way of adding to profit margin. The profit is a fee added to all other fees to be used as a payment for taking risk. Lower the risk the lower the profit. Ul.timately here we as contractors on custom home building expect 10-12% anymore and we are estactic.

If there is cost for maintaining the constrcution site you are billed just like every other line item in a contract. Then you are charged the profit on top of this as profit is based on the total cost of the project.

You will need to have a serious discussion as even contractors supervision and hours are figured in prior to profit.

good luck.

Brian Garrison
General Contractor