Re: General Issues

Jaques,

After meeting with George and Larry, it was clear that we have different
definitions of cost and profit. Their version includes the salary of a
superintendent and a junior superintendent as hard costs equivalent to third
party subs and materials. Then there is a layer of "construction management"
fees of 10%. There are some small incidental cost that they listed would be
paid out of this money. But I think the majority of it is profit. Finally
the builders profit of 1.4 million.

Keith and I were not sure whether we would be open to paying the supers out
of the cost or having them be paid out of the builders profit. After all, if
they are the builders why does there need to be two additional supervisors?
We were definitely not intending to insert an additional 10% fee in addition
to the superintendent costs. George claims that all of these costs have been
in the cost estimates that we have been using. I reviewed the estimates and
the superintendents are listed but I don't think the construction management
fee is included.

George gave me some contracts that show how these fees are standard. I will
review and let you know what I think.

The GP issues don't seem to be a point of contention. They are agreeable to
the 3 out 4 approval process.

Let me know if you have opinions or sources that I can use to push for only
true costs + 1.4 million.

Phillip