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.
- 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.
- The Owner receives "Verify Phase is Complete" when all the SOV Lines are completed and closed, and the Contractor submits for Phase Approval.
- Once the Owner releases the Phase and gives the "Stamp of Approval" anything left in the phase is directed to the Contractors Account Wallet.
- If you try to engage in a Subcontract over the SOV amount you will see the below notification.