Contractor - Building in Overhead & Profit + Buy-Down Margin

Purpose: Understand how the Contractor can build in Overhead & Profit + Buy-Down Margin

Time: 10 min

Access: Web & App

 

Building in OH&P + Buy-Down Margin

 

ONLY 2 WAYS Contractors can Make Money in the Platform:

1) OVERHEAD & PROFIT FEE disclosed in the SOV Budget

  • Anything designated with the Type designation "Overhead Fee" will be distributed directly to the General Contractor - WHEN the Owner approves that Phase. 

2) BUY-DOWN MARGIN when Subcontracting an SOV line item

  • When buying out the SOV with Subcontractors and Material Providers, the Contractor has the ability to pay LESS but Never MORE than what the line item is in the budget.  
    • i.e. If a Tile Scope is listed and has a "Sell Line" to the Owner of $1,000, the Contractor can engage and issue a Subcontract of $850, but not $1,100
    • When the example above ($1,000 SOV purchased for $850) is completed, the $150 is remaining is kept in the Phase Wallet until the Owner signs off and approves the Phase.  That is the release to the Contractors Wallet.

Additional Notes:

  1. Funds received through the platform have the standard 3% transaction fee, same as the Subcontractor and Material Providers.  - The Fee is taken at time of distribution and reflected in the Account Wallet ledger.
  2. The Owner receives "Verify Phase is Complete" when all the SOV Lines are completed and closed, and the Contractor submits for Phase Approval. 
  3. Once the Owner releases the Phase and gives the "Stamp of Approval" anything left in the phase is directed to the Contractors Account Wallet. 
  4. If you try to engage in a Subcontract over the SOV amount you will see the below notification.Screen_Shot_2022-04-22_at_5.05.48_PM.png

 

 

 

 

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