The approach you take in managing your project and engaging your team is key to achieving an excellent result, whilst equally critical in keeping your budget under control.
In our second guide to successful building, we look at how to approach a mid to large scale renovation or build project from the point that architect or designer plans are complete.
THE DEVIL IS IN THE DETAIL
Efficiency is critical when managing any sizable build or renovation project. Whilst the macro design phase may be complete and planning permission in place, there will be many detail decisions that still need to be made.
The preparation of a detailed Schedule of Works (SOW) is one of the most important steps in successfully moving a project forward from the design phase into construction.
Defined by the project architect, the SOW covers the detail, from the type and position of electrical sockets to the preferred windows or doors required, from paint finishes to joinery. A thorough SOW is valuable time invested upfront as it will ensure accurate and comparable quotes can be obtained as well as pave the way for an efficient build schedule.
Keeping your project on track
An architect or designer who remains on the project from design through to completion is one who is focused on ensuring the design becomes a successful reality.
It's not unusual for questions or unexpected issues to arise and avoiding delays is critical once work is underway. Quick, informed decision making will reduce any impact on the schedule and subsequently keeps costs under control.
It should go without saying that having a contract in place is essential and there are different types of contracts that an architect can advise on. JCT provide a range of contracts that are commonly seen as the industry standard however there are alternatives. The contract should protect all parties, clearly setting out the build terms, requirements, retention amounts and definitions.
Appointing a contract administrator is equally an important consideration. Typically, the project architect or designer takes this role overseeing the project, making sure it stays on track and is meeting expectations. Critically, they will handle queries, changes and any disputes that may arise.
“Projects that have a significant scope, in terms of both investment and detail absolutely benefit from a contract administrator overseeing the project." says Rob Beer of three | eleven design. "Clients, even those who may be familiar with building projects, will routinely overestimate the amount of time they can dedicate to communication and oversight. Factor in work, family responsibilities, even personal lives, the time available to ensure that your project is adequately looked after is limited by comparison with a dedicated project manager. Having this perspective when making large scale investments in a project can be valuable not only financially but indeed in terms of outcome satisfaction as well.”
Selecting your Contractor
Competitive tenders have historically been the most common approach to selecting a contractor for private residential builds or restorations. In theory, this approach achieves the lowest quote, however it is worth considering the potential pitfalls and the alternative option of a negotiated tender approach.
With a competitive tender the architect typically sends the tender pack out to 3 contractors for pricing. The tender pack includes the plans, structural calculations and the schedule of works.
Each contractor must carefully balance the time they invest in researching and preparing a quote whilst being mindful of the odds of being selected. Providing an accurate quote can take 3-4 weeks work - from the costing of preliminaries such as scaffolding and plant hire to awaiting prices from key suppliers and defining the labour required.
Ultimately any contractor responding to a competitive tender wants to win the project and knows their quote needs to be as low as possible. It is critical that the tender pack is as detailed as possible as the more assumptions that can be made, the more likely a quote may not reflect the final cost. If the requirements are open to interpretation then different contractors may take a different view on the quality of the materials or finish required. This can make selection challenging as tender responses can be difficult to analyse and compare.
Increasingly architects are opting for an alternative approach to the competitive tender, whereby the client chooses their preferred contractor much earlier and negotiating the price, with the back-up of a cost consultant.
The Negotiated Approach
With a negotiated tender there is a pre-selection process during which the client meets with 2-3 contractors that they and their architect believe have the right skills and experience to deliver the project successfully. Often these are trusted contractors that the architect has worked with before, however the architect may also have undertaken some pre-qualification to identify suitable contractors for the project.
In pre-selection, face-to-face meetings are held to discuss the project, budget and timescales, after which the client selects the contractor they would like to engage for the work.
Having been offered the project, the contractor can comfortably dedicate significantly more time in preparing the most accurate quote for the works. It's important to highlight that there is no formal contract at this stage, so the risk is entirely on the side of the contractor to ensure the project progresses successfully.
During the process the open discussions that occur between the contractor, architect and client result in detailed costs with which all parties feel a high level of confidence in. The contractor can highlight any aspects of the build where cost can potentially be reduced or complexity can be avoided, helping to value engineer aspects of the build. Decisions that balance design vs. budget can be made in full knowledge of the costs involved.
"The key to a negotiated contract is trust and an open pricing method, this is easiest achieved by contractors and architects who have worked together before," Rob Wilson at Granit Architects explains, "Clients worry that they are not getting the best price, but all the time and cost of a competitive tender can be saved, and should more than compensate for that."
Given that no other quotes are being sought in this approach, the architect may engage a cost consultant, usually a quantity surveyor, who can undertake a cost analysis to ensure that material and labour costs are competitive.
A simple analogy for this approach could be when recruiting a new employee - deciding who you want based on their skills, experience and approach - and then offering the position before negotiating the salary.
A great result with no surprises
The benefit of the negotiated tender approach is that there is a much higher degree of confidence that the project can be completed within the timescales and costs agreed.
"It needs to be in everyone's interest to get the work completed on time." Rob Wilson explains, "The key to our client's best interests is in managing out the risk, protecting our clients from delays and unexpected increases in cost."
Many architects seem to agree that a competitive tender may not be the most effective way to reduce the risk of delays and unexpected costs further down the line.
Some would argue that the contract and inclusion of late completion penalties (LADs) can go some way to managing risk, however for these penalties to be genuinely effective the penalty must to be higher than the potential income to a contractor from a delayed project.
In Rob Beer's opinion, "I would agree that imposing financial delay penalties does not have the gravitas to be effective. Delays which are associated with legitimate site challenges or unknown, unavoidable issues, are the risk of the client. Delays resulting from labour underperformance relative to agreed timescales are the risk of the contractor, the penalty for which should be zero payment for those additional labour costs."
With the industry moving more towards the negotiated approach, the benefits of stronger teamwork and transparency undoubtedly leads to an increase in client confidence and outcome satisfaction, with everyone benefiting from a more efficient, certainly smoother design to build journey.