Our 4-Layer Nested Contract protocol covers most nested projects with a single Prime Contract and an unlimited number of Phases, Subcontracts, and Payment Milestones.

Prime Contract

Agreement (scope and budget) between Owner & Prime Contractor.
(Initiated by the Owner video – Negotiated & Agreed to electronically by both parties)
– Broken Down by Sequential Phase
– Including all Labor / Material / Overhead & Profit – video

Modified by Prime Contract Change Order
(Submitted by Prime Contractor to Owner)
– New Scope Line Item – video
– Modify Existing Line Item

Phases

Phases are groups of Subcontracts that are sequentially adjacent to each other in the logical sequence of a project.

Phases allow a sub-division of the larger project into smaller “chunks” for easier management and progress tracking.  

Subcontracts

Agreement (scope / budget) between Prime Contractor & Subcontractor.
– Contracts for Labor and/or Material
– 2 options for issuance – Issue Subcontract – video / Request For Bid – video
– Subcontract Amounts CANNOT exceed Contract Line Item value
– Receiving Subcontractor can Accept / Reject / Negotiate – video
– NO % COMPLETE – Payment Milestones are Negotiated & Agreed to at time of Contract
(Invoices can only be submitted on Preset Payment Milestones – video)

Funds are required to be escrowed ahead of Contract issuance
Funds are awaiting distribution upon the Invoice – Verify – Approval workflow

Primary Access = Phone App
Contracts & RFP’s
Invoices are done in the Field
Change Orders are done in the Field

Modified by Change Orders
(Sub to Prime)
– Modify existing Line Item
– Approval = Payment for active work

Subcontract Milestones

A Subcontract is broken down into Payment Milestone contracts which the Subcontractor uses to invoice and verify with geo-tagged photos.

i.e.
Subcontract = $3,200 for Painter to paint the exterior of one house
– Milestone #1 = 20% upon signing for material = $640 invoice
– Milestone #2 = 40% when 50% complete = $1,280 invoice
– Milestone #3 = 40% when Complete = $1,280 invoice

Notes:
1) Milestone contracts are agreed to by both Prime Contractor and Subcontractor at the time of contract agreement
2) The Subcontractor can only Invoice against pre-established Milestone Contracts

 

 

Responsibility Matrix:

Prime Contract Subcontracts Milestone Contracts
Lender view
Owner x view
Prime Contractor x x x
Subcontractor x x