Tender costs for a new build

[Ferdinand]

18 minutes ago, DundeeDancer said:

I just think it's a really bad idea to be signing the contract on the day.

 

Absolutely agree on that. You could take the position that there are things you have to do between contract and start, with a 3rd party requiring you to do them etc.

 

(I have edited my previous post to be a little more subtle. I am having a brusque afternoon, so I'll pipe down for a bit.)

Edited September 28, 2017 by Ferdinand

[DundeeDancer]

31 minutes ago, jack said:

The only thing I'll add is that I wouldn't ever email an ultimatum in such a situation. If you can make your next communication in person somehow, that would be ideal. Next best would be a phone call.

Putting things in writing just seems to inflame things in my experience, especially in "difficult" situations, or where something doesn't seem/feel right.

 

Very good point Jack. My emails don't seem to be penetrating into their thinking to deeply anyway.

 

Maybe a softly spoken reality check in broken record style will work better. 

[DundeeDancer]

34 minutes ago, Ferdinand said:

 

Absolutely agree on that. You could take the position that there are things you have to do between contract and start, with a 3rd party requiring you to do them etc.

I suppose in reality the contract will be valid.

The draft contract has been emailed by the Architect to the builder and myself.

I have signed and given back the final contract to the Architect and the builder should be signing it ASAP.

But even if he didn't and turned up on site, it would be like him accepting the contract by default, I would hope.

Else what is he doing on site? Starting to vandalism someone property if an agreement is not in place.

Maybe I need to chill the beans. 

I just like my t's crossed, my i's dotted and contracts signed.

Just getting a bit uptight as if the builder come on site and breaks something how would the insurance company view it all?

hhhhmmmm....

Edited September 28, 2017 by DundeeDancer

[PeterW]

Contract ...?? What's a contract ..??

 

They are useful documents for the lawyers to argue over in court when it's all gone wrong, and they will spend your money for you advising why spending money on a contract was a good investment ..... and that's about it ..!

 

Is this a standard JCT terms contract ..?? Small works ..? Less than £25k..?

 

If so, the only schedule you need is the payments and milestones and the agreement about who buys what. Anything else and you're into  micro detail that is irrelevant for something of that size. 

 

Trust doesn't start with a contract ....

[AliG]

I have a contract, but it has never been signed by me or the main contractor. Implicitly we have agreed to it by working on the house.

 

I have this kind of contract, effectively it works out as a cost plus contract. The builder estimates what things will cost at the start, but this varies if things cost more as you go along. It is very difficult to price up fro architects plans, unless you wait and get all the structural engineer input. Even then issues arrive during construction. For example I have way more steel than expected in the house when we started which is by far the largest cost variation.

 

With this kind of contract there's a good chance that the house ends up costing 5-10% more than expected due to changes and unexpected costs. I am sitting at just over 10%, but I have a block built house on site, a timber frame house would be a lot less likely to have variations.

 

The builder bills me monthly and gives details on any variations, waiting until the end would be crazy.

 

To save money I have found the best thing to do is go through the estimate and make sure it all makes sense, effectively you become your own QS. For example the initial price for screed in my house was very high so I asked him to get more quotes. I also changed the spec of insulation from PIR to 400mm of glass wool which was much cheaper. You will find that the builder just orders everything up from the local merchant and as a cost plus contract he just wants the easiest place to get them, not the cheapest.

 

 

[PeterW]

+1 to this approach. 

 

My brickie did me a cost per 1000 laid but we didn't count on there being less as the QS did it on metric bricks and they are imperial reclaims - 10% saving there for me. 

 

Flip side is that I was charged per metre for soldier courses and I also included a few changes along the way such as making internal walls downstairs from block work.

 

Roofer was was on a priced rate and they vastly underestimated the effort but that was their problem.... QS estimate was out on tiles too so ended up  needing more. 

 

Electrical work is bizarre as the QS is 100% out on wire required so the costs may be much lower than estimate.

 

All of my trades are done via a text, an email or a handshake.... payment terms are agreed up front and any invoice presented by Friday 5pm is paid the following Monday. This has worked throughout and no issues so far ...

 

In contrast my only problem has been with a door supplier who insisted on having payment up front and a contract signed - and then asked me to sign the door order... when I pointed out the cill was wrong on the order it was too late as they had ordered it from their supplier and it's taken 3 weeks to resolve - and that's a formal contract and agreed terms ..!!

 

Contracts have their place in a lot of builds if you are making significant payments to single suppliers - mine are all less than £10k to any one supplier so my risk exposure is low. Change that to £100k to a single supplier and I would very much be in the detail of the fine print ..!! 

 

 

[nod]

25 minutes ago, PeterW said:

+1 to this approach. 

 

My brickie did me a cost per 1000 laid but we didn't count on there being less as the QS did it on metric bricks and they are imperial reclaims - 10% saving there for me. 

 

Flip side is that I was charged per metre for soldier courses and I also included a few changes along the way such as making internal walls downstairs from block work.

 

Roofer was was on a priced rate and they vastly underestimated the effort but that was their problem.... QS estimate was out on tiles too so ended up  needing more. 

 

Electrical work is bizarre as the QS is 100% out on wire required so the costs may be much lower than estimate.

 

All of my trades are done via a text, an email or a handshake.... payment terms are agreed up front and any invoice presented by Friday 5pm is paid the following Monday. This has worked throughout and no issues so far ...

 

In contrast my only problem has been with a door supplier who insisted on having payment up front and a contract signed - and then asked me to sign the door order... when I pointed out the cill was wrong on the order it was too late as they had ordered it from their supplier and it's taken 3 weeks to resolve - and that's a formal contract and agreed terms ..!!

 

Contracts have their place in a lot of builds if you are making significant payments to single suppliers - mine are all less than £10k to any one supplier so my risk exposure is low. Change that to £100k to a single supplier and I would very much be in the detail of the fine print ..!! 

 

 

Sounds good Peter

Though I'd be a bit concerned that your QS has struggled 

pay him a bit less than agreed

He may not notice?

[PeterW]

I use Estimators Online and then convert it to a spreadsheet. Takes a couple of hours but can be pretty accurate. 

 

Odd things missing such  as all the box ends, joints etc on fascias, roof ancillaries and a lack of PIR on walls despite it being on plans has meant I'm about 3% out on costs but have made savings elsewhere. 

[mvincentd]

On 16 August 2017 at 21:33, DundeeDancer said:

I have created a plan with an architect/Principal Designed role

So your architect who recommended this builder should in his role of Principle Designer be advising you not to let this contractor on site until you've received his RAMS with sufficient time to review it.  I'll bet if the builder can't manage time to do the contract he hasn't done RAMS, so maybe use the architect to insist on all relevant paperwork...including contract...after all how can the RAMS be correct if it isn't referring to whats contracted.

 

Real world...over and above whether paperwork is present and in order, trust your instincts.....if this builder is being dismissive of you before he's already started how well are you going to communicate throughout the build.

[Ferdinand]

On 30/09/2017 at 20:02, nod said:

Though I'd be a bit concerned that your QS has struggled 

pay him a bit less than agreed

He may not notice?

 

Heh. 

 

Will have to try that.

Edited October 5, 2017 by Ferdinand

[Kenny]

Interesting thread, a bit concerning in some cases. 

 

I'm a Chartered Quantity Surveyor, and Project Manager (not touting for business, already too busy! :)) and have been surprised at a number of things. 

 

Has no one seen the property shows, dear architect, we have 100k budget - Architect designs to suit client requests which were unrealistic and come in at 150k. 

 

There are specific steps in a commercial construction project which should be followed, take lessons from the multi million pound developers. Look at the RIBA plan of work (Google it). Initial concept design then detailed design (for planning) , should be costed and any issues ironed out before these projects are taken to site and into contract. 

 

Why would you not have a contract? Why would you not have a pricing document? Don't get an online QS to give you national average rates that mean nothing. Go local, go small practice, negotiate fees, ensuring you know what you are getting from them. Get them to procure the contractor for you, they'll have local relationships with builders they have used before. Let the architect do what they are excellent at doing, designing the accommodation you want, but let your QS cost it and manage those costs to ensure its delivered for that. Google "find a Surveyor" to get a Chartered member of the RICS.

 

Ask all professionals for a fixed price fee, why would you pay a QS / Architect a % of the finished costs when you have told them your budget from the start, no incentive to keep the costs down, but the reverse is true, the higher the build costs the more money they make!

 

FMB used to do a crystal mark contract for homeowners, not sure if it's still kicking about. I tend to use JCT or SBCC (in Scotland) minor works contracts as they are simple in nature. You do need someone professional to administrator them though, useless in someone's hands who doesn't know it back to front  including your contractor!

 

When it comes to negotiations, there is no % to agree, unless you are simply talking about the contractors profits, Best course of action is to get a proper pricing document, such as an NRM cost plan or bill of quantities (I use NRM1 to provide a cost plan, but include extra details so it can be later costed by the contractor - with my figures excluded - as part of my tender exercise. A full bill of quantities will most likely terrify most contractors who do single house projects. Once you have the completed costs in from three contractors you can other benchmark your QS's costs and make sure they are right (yes, check them too, I've seen some crazy looking spreadsheets and pie charts on this site that bear no resemblance to a proper cost plan!) and also measure any variations to your contract as your build progresses. Need an extra 25m2 of walls, no problem, refer to your tender doc, get the rate per m2 they quoted and hey presto, you have the cost of the variation (that's a bit simplistic, you will also have to consider other items in any variations such as in the case of increased wall area,  such as skirting, decor, slabs etc, but just trying to make a point)

 

I hope it helps,  and I'm happy to chat more if anyone is interested. 

 

Great site, keep up the good work team!

Kenny 

[Kenny]

On 05/10/2017 at 09:11, mvincentd said:

So your architect who recommended this builder should in his role of Principle Designer be advising you not to let this contractor on site until you've received his RAMS with sufficient time to review it.  I'll bet if the builder can't manage time to do the contract he hasn't done RAMS, so maybe use the architect to insist on all relevant paperwork...including contract...after all how can the RAMS be correct if it isn't referring to whats contracted.

 

Real world...over and above whether paperwork is present and in order, trust your instincts.....if this builder is being dismissive of you before he's already started how well are you going to communicate throughout the build.

You are totally right, a pre construction health and safety plan needs to be in place by the principal Contractor before the project commences,  check out CDM2015 on the HSE website. Homeowners are not held responsible for this when professionals are employed though as they have a duty of care inform you. 

[Jeremy Harris]

Welcome Kenny.

 

We have discussed CDM to death here before, as it applies (or rather doesn't apply in the main) to self-builders.  A look through the relevant threads where we had some fairly warm debates about CDM, may help, in terms of what we've already bottomed out on here:

 

In particular, this  post in that long thread sums up the collective position on CDM with regard to self-build, I believe, and was written shortly before we closed the thread because it had run it's course:

 

 

There is also a useful summary derived from that long thread here, and I, for one, would be grateful if we didn't risk opening up the CDM issue here again, as it caused a lot of wasted time and effort last time around, when some tried to use it as an excuse to try and extract more money from self-builders or add to their burden of responsibilities:

 

 

Edited November 10, 2017 by JSHarris

[Kenny]

Thanks for the warm welcome JS!

 

Sounds like CDM has been done to death, and as you say, it is not required from a Self Builders point of view.

 

Looking forward to spending some time perusing the chat forums in more detail in due course.

 

Best regards

Kenny

 

[Alexphd1]

Welcome Kenny,

 

 

From the other side (briefly installed gas boilers) if a customer handed me a contract to be signed i think i would have walked off the job, trust is a two way thing! We always emailed a brief job and a description inc a price which worked 98% of the time, the other 2% i could write a book on!  Obviuosly this is small change to what people are speaking about on this thread. 

 

We have done most jobs ourselves on the build but when we are out of our depth we get in trades, the biggest being 10k for pouring the main slab with a mid sized local contractor. This was done on a handshake, no contract, no deposit and it worked (for us anyway). 

 

 

 

 

 

[Kenny]

On 11/18/2017 at 21:31, Alexphd1 said:

Welcome Kenny,

 

 

From the other side (briefly installed gas boilers) if a customer handed me a contract to be signed i think i would have walked off the job, trust is a two way thing! We always emailed a brief job and a description inc a price which worked 98% of the time, the other 2% i could write a book on!  Obviuosly this is small change to what people are speaking about on this thread. 

 

We have done most jobs ourselves on the build but when we are out of our depth we get in trades, the biggest being 10k for pouring the main slab with a mid sized local contractor. This was done on a handshake, no contract, no deposit and it worked (for us anyway). 

 

 

 

 

 

 

Alex, Contracts are there for those 2% occasions! They are not only to protect the client from the builder but quite often, especially on domestic builds, I've had to use them to protect the builder from the client!!!

 

They don't have to be lengthy either, a simple domestic contract can take about 6 pages (with additional pages for explaining its administration), see the FMB one I've attached which was free to download, or the JCT Homeowners contract. Agreeing on sensible things like payment stages, timings and completion dates are all key upfront discussions to be had, and if you are one of those who does that already, you've got it nailed!

 

A good QS/PM/CA should always act with a degree of neutrality, ensuring the match has a ref, if you pardon the pun. It's not all about ripping off the builder by asking for him to shave £2 off his rates just because...there needs to be a clear rationale for these discussions.

FMB F221 Plain Domestic (-t) Building Contract.pdf

[jamiehamy]

As self builders doing most of the work ourselves, we've had contractors to lay dwarf walls, fabricate and erect steel frame, complete drainage, excavate garage, complete hard landscaping and complete electrics.

 

 

Not drawn up a contract yet. As @Alexphd1. says,  for the value the contractor would run a mile. And frankly it's far more hassle than we need on our build. I deal with various suppliers in my work and have done over several years and know that they do not solve actual problems and take so long to agree then pursue if things go wrong they are not right for us. We found local companies based on recommendations - delays or issues have been resolved by conversation, negotiation and trust. Not saying it's the approach for every self builder but absolutely has merits. 

 

 

[Nickfromwales]

1 hour ago, jamiehamy said:

delays or issues have been resolved by conversation, negotiation and trust. Not saying it's the approach for every self builder but absolutely has merits. 

Conversation is the key one, as both parties usually, incorrectly, assume each will try and have the other over. 

The biggest issue I see with other local builders is them assuming the customer won't pay extra to have some luxuries / initiatives applied to the core budget, like when I sub to them to fit a kitchen for eg the customer has a nice new smart tv but no data connection so I suggest a cat5 is pulled in to which the builder then throws a wobbler wailing "who's going to pay for that ?" when the customer has already said they're happy to pay extra for such an important ( but simply overlooked ) addition. 

I often see such stupid things being argued about at the end of the job, where a simple schedule of works would show the customer hadn't requested XYZ so the builder didn't do it. 

I don't do any job now without SOME sort of brief. 

For a full build I'd deffo have a VERY detailed SOW as there are just so many areas where this can go astray. 

[jamiehamy]

40 minutes ago, Nickfromwales said:

Conversation is the key one, as both parties usually, incorrectly, assume each will try and have the other over. 

The biggest issue I see with other local builders is them assuming the customer won't pay extra to have some luxuries / initiatives applied to the core budget, like when I sub to them to fit a kitchen for eg the customer has a nice new smart tv but no data connection so I suggest a cat5 is pulled in to which the builder then throws a wobbler wailing "who's going to pay for that ?" when the customer has already said they're happy to pay extra for such an important ( but simply overlooked ) addition. 

I often see such stupid things being argued about at the end of the job, where a simple schedule of works would show the customer hadn't requested XYZ so the builder didn't do it. 

I don't do any job now without SOME sort of brief. 

For a full build I'd deffo have a VERY detailed SOW as there are just so many areas where this can go astray. 

I would add that I always send an email outlining my requirements and what we have agreed - however when things don't go to plan I am realistic and reasonable enough to know when it's their issue to fix, mine or just for us to work on a solution together. 

 

 

[Alexphd1]

Sorry i feel the 2% that went up shit creek a contract would have made no difference, one case we went through the court for a few £k bill as soon as we won, the guy declared personnel bankruptcy.... cant get blood out of a stone!! 

[Kenny]

Let me play devils' advocate - 

What does your gentleman's agreement say about antiquities?

Let's say you have a main contractor on site, they start excavating, and holy moley they dig up a norman chest full of gold amulets.

Who do they belong to?

Contract Law would state that arisings and materials from carrying out the works belong to the Contractor! They get one sniff of that law and they will fight you all the way for a few million don't you think?

Just saying.

 

I agree with the fact that on the vast majority of well-run sites it's not required, but wow does it help when you need it. Think of playing football without a rule book - silly isn't it? How many times when you were young did you all know the rules of football but still get into an argument about who did what? I wouldn't use a contract to enforce silly rules, but certainly, if my client was at considerable risk then I would.

 

Great debate guys! I guess the moral of the story is that there is a time and a place for it, and it would definitely depend on the way in which it was introduced, and who was administering it. You need to be fair to both parties.

[SteamyTea]

On 9/28/2017 at 16:41, DundeeDancer said:

He seems like a nice guy, just been on holiday (might be an excuse), has multiple people and multiple projects on the go.

Bit out of date this reply.

But is this really the kind of builder you want in general.

When I go to work, I am there to do that job, and that job only.  I don't sneak off and do another one when I have a few minutes/hours/days 'free'.

[Ferdinand]

9 hours ago, Kenny said:

Let me play devils' advocate - 

What does your gentleman's agreement say about antiquities?

Let's say you have a main contractor on site, they start excavating, and holy moley they dig up a norman chest full of gold amulets.

Who do they belong to?

Contract Law would state that arisings and materials from carrying out the works belong to the Contractor! They get one sniff of that law and they will fight you all the way for a few million don't you think?

Just saying.

 

I agree with the fact that on the vast majority of well-run sites it's not required, but wow does it help when you need it. Think of playing football without a rule book - silly isn't it? How many times when you were young did you all know the rules of football but still get into an argument about who did what? I wouldn't use a contract to enforce silly rules, but certainly, if my client was at considerable risk then I would.

 

Great debate guys! I guess the moral of the story is that there is a time and a place for it, and it would definitely depend on the way in which it was introduced, and who was administering it. You need to be fair to both parties.

 

OT possibly.

 

In England a chest of gold coins would be referred to the Coroner then the Treasure Valuation Committee under the Treasure Act 1996. I think in practice it is split usually. Perhaps a private agreement may affect the monies afterwards.

 

There is a 75k word Code of Practice all about it :-).

 

In Scotland it is Common Law I think. Not sure what that would mean.

[Becky M]

Sorry to jump in on this post, I read it and found it super helpful.  We're a little green and about to tender for building contractors, our build budget is reasonable £170k tops - is a JCTHomeowner contract suitable for a project of this size?

 

Thank you for your help.    

[Stewarty]

Costing question: On a levelled serviced plot if the timber frame kit house for a small one and a half storey house only (116m2 ground floor area) is £40,000 would you have a rule of thumb of the full build costs assuming its a basic fit out specification?