Master service agreement
Basically, a master service agreement, or MSA, is a generic contract that two parties negotiate and sign before potential work comes up. It’s usually sent before undertaking multiple projects or ongoing work and sets the general terms of the relationship going forward.
What does an MSA include?
An MSA includes terms about payment processing, insurance requirements, warranties, risk allocation, dispute resolution, termination, and other standard contract clauses. It doesn’t include specific information about a project or the scope of work to be performed. Those specific terms are usually addressed in a work order, statement of work, or addendum that is issued on a per-project basis.
The benefits of an Master Service Agreement
MSAs are beneficial for both contractors and project owners because they improve the efficiency of getting a contract together: Terms only have to be reviewed and negotiated once instead of multiple times. It also helps build a relationship between the parties — although, an owner is not required to use a contractor they have an MSA with. MSAs are not guarantees of work. Owners can choose to go to contract with whomever they want.
Master Services Agreement by Savon
This is an indefinite-delivery, indefinite-quantity (IDIQ) project delivery method which means that multiple construction projects can be completed over the life of one long-term contract, as opposed to the single-project contracts. The longtermlong-term contract makes MSA an ideal choice for owners who complete a high volume of construction projects over the course of each year. We have clients who utilize this delivery method to complete a multitude of fit-outs inside one building.
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