Open Book (cost +) vs Fixed Price

[Nickfromwales]

11 hours ago, Mr Blobby said:

I reckon if I ran the project myself and engaged the trades directly they would be more likely to take the piss.

Yup

[charlieroper]

Thank you for everyone's thoughts and advice - I thought I would let you know that we have decided to go ahead on the cost+ basis with the builders in question.

We know there is an inherent risk with this but as many people have said, given the age of the building invovled, the fixed price alternative  was highly likely to have variations added on without the transparency that cost+ enables. Our builders are pretty slick and have a portal for all invoices and time sheets which are updated daily to give a running picture of what has actually been spent and given we are living on site we will have a good idea if these are honest or not.

Thanks again for all the advice and I will keep you updated as  to how things progress!

[Dave Jones]

your overthinking it.

 

If you have it QS'd thats the price for the work. Not QS + another 30 or 40% because they had long tea breaks a couple days. Fix the quote to the QS and pay to the QS in arrears monthly.

 

Have the chap who did the QS do the visit each month and give you a report of what you need to pay. 

 

Fair to everyone and you all know from the start where you stand.

[saveasteading]

4 hours ago, Dave Jones said:

If you have it QS'd

by an independent QS then it is likely to have some contingency built in. Not for the contractor, but to ensure you aren't being given an over-optimistic quote.

I'm speaking from seeing a few peoples BOQ's that had some big extra lumps in them. 

And as an Estimator the risks have to be allowed somewhere.

Our joiner had our work measured and costed by a QS and I found almost everything was over-measured.  But perhaps that is OK as long as the builder doesn't also look for wastage.

 

If the builder provides you with such a BofQ then that would be a contract document to measure all works done. 

It doesn't have to be detailed. Our habit with clients was to summarise a project, regardless of value,  into about 20 items.  Then you simply agree that eg half the site clearance and 30% of the footings are complete, etc.

 

 

If he is clever he will front load it slightly , but that can be fair as they do have start-up inefficiencies.

 

I don't think what you're doing is wrong, as the builder will hide risks in any lump sums. If you are taking the risks out  of his pocket and into yours, , then just make sure you are on top of it all.