Target Cost Contracting.

Genus has always been at the forefront of new concepts and new ideas, bringing benefits to clients that other designers/contractors are unable to match.

Our non adversarial approach and our partnership arrangements with existing clients has lead naturally to this unique form of contract, the major benefit of which, unlike any other form of contract, ensures maximum project costs and provides genuine savings for clients.

Rationale - avoiding the tender trap.

Genus is appointed, either in competition or by negotiation.  Our bid price forms the Target Cost but Genus is paid the actual costs for executing the work, so long as this is less than, or equal to the original Target Cost.  The Target Cost is, in effect, a Guaranteed Maximum. 

Any saving on the Target Cost is split, normally 50/50 between Genus and the client. However, the percentage split can be adjusted and could include the professional team as well on the basis of say 50% to the client, 40% to Genus and 10% to the professional team. (Architect, QS, Project Manager etc.)

There are considerable advantages with this unique form of contract:

• Enables an early start to be made on site as Genus can be appointed before the full design is completed.

• Establishes the client’s maximum financial commitment (subject to client variations).  If Genus costs exceed the Target Cost, only the Target Cost sum is paid.

• Gives the opportunity for the client to benefit from any savings made by Genus as the project progresses. Unlike any other contract, where only the contractor benefits from any savings, these savings are passed back to the client.

• It is particularly useful in cases where potential risks may be priced in the original bid, as under this contract if those risks do not materialise the saving is shared.

• Provides a non adversarial approach with both parties benefiting from savings made.

• The client or his professional team have complete access to Genus actual costs.

Appropriateness

This form of contract is most appropriate for projects where the client wants to establish a maximum financial commitment at an early stage, with a less adversarial relationship and a share in any savings made.

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Genus Interiors: the future of unique working partnerships.