Issues with extension spiralling costs

[SimonR]

As Buffman has said, houses are all indicvidual. Let's say you are digging foundations fot an extension and you find an obstruction that needs removing . It's no one's fault. The contractor hasn't factored in an extra day labour to do it. Assuming you want your extension to proceed, you have no choice but to pay up for the additional work.

Equally you can't expect contractors to factor in unknown risks in their quotes. That's why domestic clients should always allow for a contingency poy of money.

Of course you can, its called a fixed price Quote, it assumes that the contractor takes on the risks (unless they are specifically excluded from the contract). If he undertakes to provide works and services for a fixed price, as part of a contract and it over-runs, that is his problem. That is why quotes are often time-limited. That is the difference between a Quote and an Estimate. On the flip side if you forgot to include something in the contract or want extras, then they are often dealt with under additional works or amendments to the contract and you can expect to pay a premium for these.

 

[Deleted User 298457]

Of course you can, its called a fixed price Quote, it assumes that the contractor takes on the risks (unless they are specifically excluded from the contract). If he undertakes to provide works and services for a fixed price, as part of a contract and it over-runs, that is his problem. That is why quotes are often time-limited. That is the difference between a Quote and an Estimate. On the flip side if you forgot to include something in the contract or want extras, then they are often dealt with under additional works or amendments to the contract and you can expect to pay a premium for these.

The quote will include ASSUMPTIONS, that once challenged invoke T&M payments. Simples. No one is doing fixed price contracts without assumptions that get progressively validated....

 

[jaybee]

I just feel like the way it currently is promotes builders making money and not finishing a job. They can just make things up if they get bored on a job and want to start a new profitable one. They have you over a barrel.

EDIT: This is why you find a "reliable" and "good" builder. My mate did this and got his recommended mate's mate in...went over budget by nearly double still.

 

[jaybee]

..... There's a reason T&M projects exist and its to manage the risk around uncertainty. Otherwise you end up baking in so much contingency into your fixed price that you will never get any project initiated. ....

I think this is the issue. People under price to get the work even when they know it is likely to go over.

 

[Deleted User 298457]

I just feel like the way it currently is promotes builders making money and not finishing a job. They can just make things up if they get bored on a job and want to start a new profitable one. They have you over a barrel.

EDIT: This is why you find a "reliable" and "good" builder. My mate did this and got his recommended mate's mate in...went over budget by nearly double still.

It is the same as any industry. Why would a supplier be on the hook for example, if you had wood rot and he signed up to do a roof replacement? It isn't his problem.

RE: the getting bored thing, it definitely plays out - but that's where milestone payments come into things and pre-agreeing snagging days.

Folk are just way too unrealistic.

 

[DB_SamX]

Of course you can, its called a fixed price Quote, it assumes that the contractor takes on the risks (unless they are specifically excluded from the contract). If he undertakes to provide works and services for a fixed price, as part of a contract and it over-runs, that is his problem. That is why quotes are often time-limited. That is the difference between a Quote and an Estimate. On the flip side if you forgot to include something in the contract or want extras, then they are often dealt with under additional works or amendments to the contract and you can expect to pay a premium for these.

Theoretically yes, but in reality contractors rarely takes on all the risks in construction, even if it's turnkey procurement. They will allow so many provisional sums that they will no longer be competitive.