Appointing a main contractor/builder - things to consider

[Tom]

So we hope to start our build in the next 6 weeks or so. We have had a few fixed price tenders back which are way over budget so they are a non-starter, a local builder we know has built similar and is convinced he can bring the project in for what we need, and has suggested a time+materials arrangement and we've decided to go with this.

We are going to meet up again in the next few days to sort out more details etc but I'm wondering if any one has any advice on what details we need to nail down at the start? I'm thinking:

 

- rough timeline, so we can get some idea as we go along if things are slipping, costs going up etc

- payment schedule: weekly? monthly? in construction stages, foundations, walls etc?

- retention of final £X% for snagging etc?

- what if I'm not happy with something - some sort of agreement on rectifying without cost to myself?

- site insurance

- some sort of commitment on hours/week? - I don't want the build dragging on as it's being used to fill in hours around other jobs etc

 

Is the above reasonable? What else?

Thanks all

 

[Bramco]

Hi Tom,

 

We'd be very interested to see what your tender looked like - we're about to write ours. Obviously there will be many differences but it would be helpful to see what level of detail you went to, over and above the drawings.

 

Simon

[Moonshine]

I presume you building regs drawings and any CIL exception are in?

 

Interested in following this as i am going through this process.

 

Being nosey where in South Devon area you? I am in Devon

 

 

[Tom]

6 minutes ago, Bramco said:

Hi Tom,

 

We'd be very interested to see what your tender looked like - we're about to write ours. Obviously there will be many differences but it would be helpful to see what level of detail you went to, over and above the drawings.

 

Simon

 

The tenders were very detailed as it happened - just very expensive! They were based on the full set of drawings from the architect - one builder said he'd never seen such a comprehensive set of drawings. We didn't provide any more information than that TBH.

3 minutes ago, Moonshine said:

I presume you building regs drawings and any CIL exception are in?

 

Interested in following this as i am going through this process.

 

Being nosey where in South Devon area you? I am in Devon

 

 

No CIL where we are and building regs approved on drawings.

We're just south of Totnes - whereabouts are you?

[Bonner]

I am at a similar point, bigger contractors came back with silly quotes but small local builder much more reasonable. However we are going to sign a JCT contract with fixed price for water tight shell. Not exactly sure what time and material arrangements you have decided but I would be very wary of costs going out of control. If your builder is convinced he can bring it on budget, why not fixed price?

[cwr]

+1 for a contract.

We used a RIBA template. A bit like insurance, hopefully you never have to look at it again. However, in addition to providing an agreement, the act of going through it line by line raised a few points that needed a bit more discussion and it acted as a good check list of items to review with the main contractor.

[Tom]

12 minutes ago, Bonner said:

I am at a similar point, bigger contractors came back with silly quotes but small local builder much more reasonable. However we are going to sign a JCT contract with fixed price for water tight shell. Not exactly sure what time and material arrangements you have decided but I would be very wary of costs going out of control. If your builder is convinced he can bring it on budget, why not fixed price?

 

Good point, but I think one of the factors being that I can potentially work/labour as and when I can and bring the costs down, which I couldn't with a fixed price

4 minutes ago, cwr said:

+1 for a contract.

We used a RIBA template. A bit like insurance, hopefully you never have to look at it again. However, in addition to providing an agreement, the act of going through it line by line raised a few points that needed a bit more discussion and it acted as a good check list of items to review with the main contractor.

Is the RIBA template aimed at fixed price?

[Bonner]

27 minutes ago, Tom said:

Good point, but I think one of the factors being that I can potentially work/labour as and when I can and bring the costs down, which I couldn't with a fixed price

 

I will be doing a lot of work to keep costs down, building detached garage, second fix etc. but I decided to leave the shell to the builder, otherwise I might just get in the way. I will be going in to fit MVHR ducts and other extras but mostly weekends when the builder is offsite. 

[TonyT]

Payment after agreed stages are complete.

 

[Temp]

3 minutes ago, TonyT said:

Payment after agreed stages are complete.

 

 

Making sure these are consistent with any stages as the lender requires.

 

Retain 5% or 10% of each stage for snagging.  

[Bramco]

21 hours ago, Tom said:

The tenders were very detailed as it happened - just very expensive! They were based on the full set of drawings from the architect - one builder said he'd never seen such a comprehensive set of drawings. We didn't provide any more information than that TBH.

 

Thanks for the info.

 

Simon

[Tom]

On 23/02/2021 at 16:11, Temp said:

 

Retain 5% or 10% of each stage for snagging.  

Agree this is a good idea, but how would this work in practice on a time+materials basis? What's to stop the builder inflating their time costs to cover for this? Is snagging only something for fixed price arrangements?

[Conor]

Sorry to be blunt but you'd be a fool to take on such a big project on a time + materials basis. 100% of the risk is on you. What happens if the ground works take a week longer? There a few grand on you. Bad weather slows down the block work? That's on you. One of the trades messes up and causes delays. You'll pay for that. Where's the incentive for the builder to source the cheapest materials? What's to stop him from sandbagging and slowing the work pace down?

 

If the fixed price contracts have come in over budget, consider doing what we did. We knew a single contract for everything would be too much, so we have split the build in to smaller contracts. First was the groundworks. My mate with his digger did that.

 

We then got a single fixed price contract put together for the main structural works - foundations, walls, floor slabs and steels. 

 

For the rest we're getting in individual trades. I've just got the scaffolding sorted, got a price from a roofer, meeting a plumber today, spark on Friday. Takes time but that's where you save the ~30% on a single main contractor. You take on more risk but it's all in smaller chunks.

[Tom]

Good point Conor. I think splitting it up into chunks as you say would be far more sensible. I will have another think - we're meeting the builder on-site tomorrow to discuss.

[Tom]

1 hour ago, Conor said:

 100% of the risk is on you. What happens if the ground works take a week longer? There a few grand on you. Bad weather slows down the block work? That's on you.

 

...but of course all that risk is factored in to any fixed price contract (to an extent), so you will be paying for it either way. Though with a fixed price you will DEFINITELY be paying for it...

[WWilts]

On 25/02/2021 at 08:27, Tom said:

with a fixed price you will DEFINITELY be paying for it..

Fixed price sort of puts an upper limit on how much you will pay out (apart from variations). Cost plus incentivises trades to maximise client's expenditure by going slow, buying conveniently rather than competitively, pushing for variations (some of which will be definite improvements that benefit the client).

We're at a similar stage, seeking quotes from very detailed tender - drawings plus QS estimates (estimates available for £186 incl VAT from estimatorsonline.com). Let's see if the QS estimates encourage sensible quotes. Contractor just needs to decide their profit/overheads level, assuming their QS more or less agrees with ours. That's the theory, anyhow. Let's see how it pans out.

Trying to get agreed target price with share in cost savings. And agreed day rates for unforeseen variations.

Till watertight shell / first fix to allow airtightness 4.0 to be tested.

Fallback option is architect-recommended builder. They have worked together before. Asking for similar quote from that builder too. Nice low price from architect for CML certificate and low hourly rate for additional work if needed.

If all fails then invest in PM and hire in trades. OR bite the bullet and self-manage (despite little time or appetite for doing this).

References also sought from builders.

Interested to hear ideas on how folks are faring with various approaches to appointing main contractor or builder or trades.

[Dave Jones]

On 23/02/2021 at 12:04, Tom said:

So we hope to start our build in the next 6 weeks or so. We have had a few fixed price tenders back which are way over budget so they are a non-starter, a local builder we know has built similar and is convinced he can bring the project in for what we need, and has suggested a time+materials arrangement and we've decided to go with this.

We are going to meet up again in the next few days to sort out more details etc but I'm wondering if any one has any advice on what details we need to nail down at the start? I'm thinking:

 

- rough timeline, so we can get some idea as we go along if things are slipping, costs going up etc

- payment schedule: weekly? monthly? in construction stages, foundations, walls etc?

- retention of final £X% for snagging etc?

- what if I'm not happy with something - some sort of agreement on rectifying without cost to myself?

- site insurance

- some sort of commitment on hours/week? - I don't want the build dragging on as it's being used to fill in hours around other jobs etc

 

Is the above reasonable? What else?

Thanks all

 

 

when you say time and materials do you mean builder turns up and charges you day rate ?

 

recipe for disaster.

[Bitpipe]

We only had two trades work day rates - joiner and landscaper. Everyone else was fixed price, supply and fit (zero rated obvs). Two major packages, one for demolition,  basement and services; second for airtight timber frame. Everything else - windows, roofing, render, electrics, plumbing, plastering, flooring, tiling, kitchen, decorators etc.. was a standalone package.

 

The joiner was finding it hard to size the job - he first came on the back of first fix and was there to box in services and put in door frames etc so we could get to plastering stage but there were lots of bitty jobs to do also (noggins for sinks etc..). Thereafter he was hanging doors, doing skirting and architrave and building a few bespoke cupboards in hall, etc. 

 

Day rate with us sourcing materials worked and he was a solid worker but the slow and steady type. However there was once or twice when I would think to myself - is that all you achieved today? There was always a polite way to ask how much longer a given job would take and was anything holding them back and he usually caught up with the initial estimate that we used to agree ahead of each specific job.

 

Landscaper was similar, job was too big for him to estimate so we took it a week at a time and he got a lot done, came back for three or four visits over the year to get it all finished. 

 

I would advise against it as it's very trust based and even then you can get disappointed.  Break job into logical chunks and get quotes for each bit, both from your local builder but others also.

 

Also - be wary that your tenders are all coming back as over budget or 'silly'. The hard truth may be that your design and desired timescales and finish are over your budget and the local guy is telling you what you want to hear. When you run out of money he will be off the job and you'll be left with an incomplete build.

 

What are the £/m2 for the tenders coming in at?

 

[Dave Jones]

britpipe is right here, what is your m2 costs from the tenders ? List them all if you can.

[CADjockey]

On 28/02/2021 at 12:29, WWilts said:

We're at a similar stage, seeking quotes from very detailed tender - drawings plus QS estimates (estimates available for £186 incl VAT from estimatorsonline.com). Let's see if the QS estimates encourage sensible quotes. Contractor just needs to decide their profit/overheads level, assuming their QS more or less agrees with ours. That's the theory, anyhow. Let's see how it pans out.

 

@WWilts how did it pan out for you? We have just sent drawings and structural calcs to estimators-onilne and just awaiting numbers back.

[WWilts]

Very well so far.

 

Detailed tender definitely helps, and the going rates for labour help too. Extras can be identified and an agreement at the outset to put out major extras to tender helps.

Promised a good bonus to builder if the build is completed within budget. Also had agreement for 50% share in price increases or savings. But just the incentive and a collaborative approach seem to work well, not enforcing the 50% clause so far. Also managed to get agreement for some major materials to be purchased by us. Can save thousands that way. Cutting out unhelpful frills helps the builder to meet target and improve the chances of receiving a good bonus at the end.

[Andehh]

As has been said, what are the tenders sitting at? Might give us a chance to  suggest high or lower. 

[TonyT]

Keep everything in writing

get a site diary, record weather, deliveries.

persons on site, discussions made on site- then email confirmation later in the day.- this will help when the arguing starts later.