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Currently discussing our extension with various builders, so far 5 - have received no formal quotes yet.... however 2 of the 5 suggested a T&M contract, 2 were fixed price, and one seemed to be somewhere in the middle with hedging their bets on material prices.
I have some contract experience from a different industry.... generally I understand T&M means I'm taking the risk on, whereas if its fixed the builder is. So in fixed price the builder is likely to be budgeting for worst case, and if it turns out better, its additional profit. So T&M should be cheaper but more risky. But I'm also assuming at T&M I would be paying retail prices on materials rather than builder passing on any wholesale discounts
Is this too simplistic? Would T&M be a really bad idea?
scale of project - knocking through a few internal walls, 9 steels (6 doubled up), replacing consveratory with proper extension, moving of kitchen to new space and general updating / refurb. Timelines have been suggested between 3 and 5 months work. No prices given yet.
EDIT - I am reasonably competent DIYer, so have done small scale refurbs, but nothing structural. So with T&M I could potentially pitch in to make it cheaper
T&M. No incentive to do it quickly and the work will drag on for ages and cost a fortune.
Fixed price. Lots of incentive to do it quickly so it will be a rushed bodge job.
Tricky one.
I work in construction and the price rises over the last year or so have been mind boggling, some items I require have gone up between 20 & 55% this year alone. At the moment I wouldn't give a fixed cost unless I already had the materials in stock, if I was buying them in I would guarantee my costs for no more than a month.
As a customer, I'd be wary of someone offering a fixed cost quote for the reasons you state, they might be looking to profit on the uncertainty. One option is for you to pay for the materials now and wait for the builder to become available, if the builder is prepared to work like that.
Day work rate is fine if you trust the builders, plenty of construction workers work hard on a day work rate. They won't go out of their way to source the cheapest materials though. Fixed price is risky though not just because of a quickly executed bodge job but because of the risk of front loading and paying for work which hasn't been done leaving little money to the point that they can't be arsed to finish the job.
The only risk-free solution imo is to use builders that you know and trust, which obviously isn't always an easy option. I would focus more on recommendations than price.
T&M. No incentive to do it quickly and the work will drag on for ages and cost a fortune.
Fixed price. Lots of incentive to do it quickly so it will be a rushed bodge job.
Today's award for Most Useful Response goes to... 😂
I'm not a builder but if I was I'd be wary of giving an open ended fixed price at the moment, or I'd price in massive risk.
As long as they are reputable I'd probably go T&M on the basis of an approximate quote and with a well defined payment schedule. I'm sure the builder would still be happy to source the materials for you - the more he orders the better his discounts - but removing or sharing the risk with him would be a smart move for both of you.
risk of front loading and paying for work which hasn’t been done leaving little money to the point that they can’t be arsed to finish the job.
This is a great point, I've been bitten by this before. Thankfully didn't cost me a lot other than frustration.
All the builders are from recommendation, either local or via the architect/structural engineer. We haven't used any before. The fixed price guys came across more professional / more like PMs had staff whereas the T&M were much rougher round the edges, actual builder types with a small team and then sub out. I guess with fixed price you are also paying for the client management aspects
I am leaning towards T&M, but guess what the T&M had the longest timescales.. My main priority is getting all the structural stuff done, after that I could probably do most of the rest myself (it will just take a long time)
Day work rate is fine if you trust the builders, plenty of construction workers work hard on a day work rate.
I did this for our workshop, overall cost came in at under half the quotes for the total job as a fixed price. Brickie worked his nuts off for £150 a day which I thought was amazing (2013 prices).
also talk from one about paying a phase in advance - is that normal in construction? in my industry you normally pay on completion of a phase
I guess the trust issue works both ways, if they have never dealt with you before. You might be worried they'll do a runner, they might worry that you'll run out of money.
Always gone with T&M and it's been fine plus I can claim some materials back against my business.
Builders were trusted though.
I've not paid for phases in advance but I have made an upfront payment to help with initial outlay on materials, payment after that on completion of each phase. No doubt some of that initial payment carried over to the next phase but it worked well for me and reduced risk for both.
I guess the trust issue works both ways, if they have never dealt with you before. You might be worried they’ll do a runner, they might worry that you’ll run out of money.
It does, but any trade has a lot of experience dealing with customers, and will filter out / amend prices for dick head factor (I speak as a trade). Suggesting to help out with some jobs to cut costs is a definite red flag!
There have been comments above about trusting the builder. Whatever you do, don't trust the builder - that's what contracts are for and your architect should be able to compile one that details job requirements, specifications, costs, changes to scope and completion dates.
I agree having a contract which has the builders by the bollox does reduce the risks, but getting an architect to draw one up and enforce its compliance works better for major property developers than it does for someone like the OP who is so desperate to keep costs down that he even wants to offer to muck in.
Plenty of people get satisfactory results from having extensions built by trusted/recommended builders. Certainly plenty I know.
Not sure why mucking in is a red flag. It would consistent of stuff like cleaning the site in the evenings and that sort of thing, or lifting the patio myself. I've already started with the tear out of fixtures because I want the job to start moving.
I'd much rather not muck in and let them get on with it, but with everyone going on about how prices are going through the roof it is worrying me that we won't be able to afford everything we need. day rates quoted are in the region of £250 per day per general builder. one way to claw costs back are to do elements myself - such as the finishing carpentry and the like. I've done bathrooms, tiling, flooring, some eletrics and plumbing with good results. Its just it takes me time, and I'd rather I could pay some one to sort it faster than I can.
Until I actually get a qoute back i won't know as I'm a bit in the dark, the first builders came round over a month ago now, still no quotes.
Cost of living fears don't seem to be slowing down work for the construction industry!
Cost of living fears don’t seem to be slowing down work for the construction industry!
Give it time.
1) Worst of the cost of living rises are still to hit. Major jobs are booked months in advance.
2) Construction has had a big boost from folk shovelling cash into their houses that would normally be accounted for by restaurants, holidays, going out etc. You would expect now that that will rebalance to some extent
Not sure why mucking in is a red flag.
It isn't imo but it depends what you mean. Saying to the builders "leave that stuff I'll sweep up when you're gone", or taking deliveries and wheelbarrowing bricks round to the back of the job on a Saturday when they're not around, which I think is what you mean, sounds fine to me - it gives them more time to get on with the work.
However hands-on working alongside them is a no-no imo. But I don't think that's what you meant. Obviously it needs a conversation with them to explain what you have in mind and checking that they are alright with it.
Most standard-form domestic construction contracts provide for a fixed price, with potential options for reimbursement for any variations (such as if you wanted to change the specification etc).
It also depends whether you will be using the architect or someone else as contract administrator/employer's agent.
My recommendation would be to get some advice from your architect on using a standard-form contract with appropriate amendments to suit your particular circumstances. For example, a JCT Minor Works contract is very employer-focused whereas an FMB one leans more towards the builder. RIBA contracts fall somewhere in between. It's important that your architect actually knows what they're doing though - if they haven't got contract administration experience ask them to put you in touch with someone that does to avoid expensive mistakes down the line.
Whatever you do, don't let the contractor administer the contract though! I recently dealt with a matter where the contractor appointed themselves contract administrator and quantity surveyor, and were waving through all manner of inflated payments and cost increases.
Materials fluctuations are a big issue in the construction industry ATM on both small and large-scale projects. By way of example, I spoke to a roofing contractor today and he said he priced some particular materials for a job a few months back at £1,400. Went back to his supplier today and the same materials were £2,100.
I would be broadly sympathetic to a contractor but on the other hand as a consumer I'd be after a fixed price. If your contract is being dealt with properly you should have a contingency sum in any event which, if you agree, could be applied to deal with significant materials cost increases.
If the steelwork can be done independently of the builder, then get a price from a local fabricator. Steel cost has gone up massively in the past 6 months or so, and will continue to do so in the short term. Stockists are giving 24 hour acceptance on quotes.
By the time the builder puts on their markup , it can get silly.
I wouldn’t recommend an open ended time and materials arrangement. Thinking back to when we had our extension built it was on a fixed price based on good architects drawings. The builders forgot to hook up the cooker hood to an outdoor vent. There was also another couple of more minor snagging issues. If the arrangement had been T&M I would have been charged for all their snagging work. Costs could quite easily run out of control.
Best way would be to purchase the bulk of the materials directly through the builder's trade accounts and benefit from any discounts - don't bother with sundry fixings etc. Get the builder to schedule out what needs to be bought and to demonstrate the quantities required including wastage allowances. Then get the builder to take the risk on the quantities. Go lump sum on the rest. Time and materials are a hiding to nothing.
We had our roof done last year, had to wait a year so roofer had offered a pre material increase price. In fact everything went up, skip, wood doubled. He was q honest about it so we were happy to pay a bit more.
We had not actually used him before, top job, he only does roofs and the 2 of them worked constantly in rain and sun.
What struck me was he only wanted paying in full at the end, ie, no commitment up front. It was a 10k plus job, still can't believe it, I suppose he could strip the new roof off if we didn't pay.
It was deffo worth the wait, the other guys could start within a month and did all building work.
All of you saying "use the builders discount to make it cheaper" I assume don't run a business, that discount is his not the customers, I have a markup on all materials I buy to cover my responsibility for providing and guaranteeing them.
Do you expect to buy bread and milk from tesco for the same price they pay for it from their suppliers?
Why is the building trade expected to be treated different?
"Currently discussing our extension with various builders, so far 5....."
4 , or maybe 5, builders are now wasting their time and effort quoting for a job that they are not going to get. When they could be out earning money on real jobs.
Have you considered not bothering with an extension; that would save the money , and the mess and the time and effort all round?
Fixed price doesn't mean the builder is carrying risk, it just means you're paying it whether that risk is realised or not. As a consultant I never understand why clients push it, other than they feel they're "sticking it to the man" to get a great deal. They aren't, I'm making more money on those contracts.
If you want best value manage the risk where it is best placed, your builder has no control over materials prices but does have control over time, so fix time but you pay variation in materials seems a good starting point.
You could break it down into smaller jobs and get fixed prices on each? That way you're taking on the overall project management risk, and the people you're paying only have to deal with the risk within their expertise so will be able to quote accurately with less risk built in.
Does anyone in small scale construction work to G-max contracts? Same as T+M but you set a fixed maximum price, so if the risks dont actualise you make the saving not the contractor. It's quite common on large projects.
G-max is just a variation on cost plus where the plus element is subject to a cap.
Unless the client is/has a competent QS the contractor will always find a way to justify why they hit the cap.
I don't expect a contractor to make anything on materials. Thats what the labour costs are for. Tight maybe but thats how I work. Seems fine to me.
He who supplies the materials should benefit from the discount and the mark-up on those materials. Whether the supplier be the employer or the contractor.
If you don’t want the contractor to take a margin on materials, then buy them yourself. However, if you screw-up on deliveries, then the risk is you pay for the builder to be sitting around doing nothing if there’s a delay or if the wrong stuff turns up.
I don’t expect a contractor to make anything on materials. Thats what the labour costs are for. Tight maybe but thats how I work. Seems fine to me.
and how dose that ideology sit with you regarding....bike shops, supermarkets etc..
I actually come from the same council estate as the younger bloke (Robin) in the utube video ....haven't seen him for ages but he really knows his stuff.
I'm a sole trader and if given a choice I would rather do day work , mainly because there is always surprises that you can't account for
I don’t expect a contractor to make anything on materials. Thats what the labour costs are for. Tight maybe but thats how I work. Seems fine to me.
Are you in the trade or just a clueless punter ?
well had a few more builders round, there is a huge variance in how they all want to work, so I'm expecting huge variances in the cost.
some just a day rate, some fixed price per phase, some fixed price per phase per labour. about half have said they'll just show me the invoice for materials and I pay it. So presume that's me getting the builders discount. one said you buy what you want and I fit.
it's a bloody nightmare. so far other than sucking in air not a single builder has given even an indicative number. closesrs I've got is the architect who said about £70k....so we arent talking small numbers, hence why I dont want to be making mistakes. oh and comments about how much everything has gone up, and examples of clients getting stung.
and I'm not sure why you think im wasting peoples time patron, I'm through planning and building control and have a hefty sum saved and if I get a quote that isnt taking the piss I'm ready to start tomorrow.
I actually appreciated one guy who I spoke to on the phone who said, I'm booked for over a year, really isnt any point in coming over. least I know where I stand!
When I fix price something it’s usually circa 20% more than what I think the T&M would be - that’s my risk buffer.
I’ve got is the architect who said about £70k….
Wow that's a big job, I had no idea. I reckon you can forget about mucking in by sweeping up at after they've gone or loading materials to the back of the house for them, it won't have any significant effect on the price.
Jakester's comments must be the most appropriate under the circumstances.
no definitely not small change! alot of internal load bearing walls being removed, so alot of structural work. stuff I really can't do and needs a team if experienced guys with insurance!
Once the shell is up I can with the help of my neighbour (semi retied plaster / builder) probably do the rest, but it will take forever. I would much rather get it done all in one go by one builder.
as soon as I get quotes in I'll start looking into the contracts side of things. my preference is to fix labour and just suck up materials variance. but, if I was to do that I would also want to benefit jf materials got cheaper, not just get stung if they go up.
Most importantly you need a recommended, trusted builder
If you want best value manage the risk where it is best placed, your builder has no control over materials prices but does have control over time, so fix time but you pay variation in materials seems a good starting point.
The mechanics of this will be harder in practice, which is why you need a trusted builder who is prepared to show you their invoices. Don't complain about the builder's discount not being passed on because they're the ones who have to sort out materials ordering and problems that arise with those materials.
You can't insist on fixed time and then sort your own materials because if there is a delivery mess-up the builder loses.
I would also want to benefit jf materials got cheaper, not just get stung if they go up.
Don't worry. They won't.
I've been made aware of a couple of major (£100m+) tenders that have been withdrawn recently because the requirement for 3 months validity after submission had been challenged by all the tenderers down to less than 4 weeks due to materials price inflation.
I'm expecting variability on materials to get worse the further the job is out, theoretically cost of living should start biting and driving some costs down. we'll that's what the BOE is trying to do with upping jnterest rates. Once clients start postponing work youd expect it to have an impact. I don't want to get hooked into a contract where I'm waiting a year and then paying over retail. one builder gave an example of OSB, costing £11 a sheet pre covid, went up to £44 and now at around £28 to show the fluctuations and when you factor that in over the whole job can make several k difference
**bookmarked**