When is a fixed price NOT a fixed price?

[pudzer]

I'm worn out! In the middle of a direct labour build and am fed up with tradesmen coming onto my site, agreeing a fixed price for a job and then, halfway through the job, phoning me and whining about how its going to be extra because of such a such a problem.

Last week it was the carpenters saying the blocks were slighytly too high to fit the window boards properly. This week its the plumber saying the showers that I chose are different than normal and they will cost more to put in. Oh man, am I fed up with this crap!

My answer to them is that if the job takes less than it's supposed to, they don't hand me back the change. Also, they all get ample opportunity to walk around the site prior to pricing.

What's the real line on this? Can they continue to do this and get away with it? These tradesmen seem to be a law unto themselves.

 

[sydthebeat]

I'm worn out! In the middle of a direct labour build and am fed up with tradesmen coming onto my site, agreeing a fixed price for a job and then, halfway through the job, phoning me and whining about how its going to be extra because of such a such a problem.

Last week it was the carpenters saying the blocks were slighytly too high to fit the window boards properly. This week its the plumber saying the showers that I chose are different than normal and they will cost more to put in. Oh man, am I fed up with this crap!

My answer to them is that if the job takes less than it's supposed to, they don't hand me back the change. Also, they all get ample opportunity to walk around the site prior to pricing.

What's the real line on this? Can they continue to do this and get away with it? These tradesmen seem to be a law unto themselves.

welcome to recessionary times... the contractors will give you low quotes in order to get in on site, and then all the 'extras' start to hit in...!!!

the only way to sort this out properly is to keep everything official... get specifications written up, get bills of quantities done up etc...

pennies pinched can equate to pounds cost....

if the build is planned properly, and supervised properly.. theres no chances of extras arising!!!

 

[z103]

What's the real line on this? Can they continue to do this and get away with it?

Simply don't accept this nonsense from them. If they've underestimated the quote, then that's their problem.
I had exactly the same problem with stairs I had put in - quote one price, charge another. They'll come up with all kinds of excuses. I paid the original price, because that was what was quoted, and what I had budgeted for. (I posted about it on here at the time)
Tradespeople will start to learn what it's like to do business in the real world, and not the bubble world of yesteryear.

 

[DavyJones]

recessionary times or not, extras will always happen on jobs. Mainly because client changes mind. Did you give the tradespeople a detailed spec and drawing to work off? did you tell architect or building/ tradespeople exactly what you wanted at the start of project?
have they to remove stuff to allow for change or has it been done yet? I would only charge If I did something that was agreed and then we had to change it afterwards meaning extra work. I would rarely charge for a minor change before we did it.

What type of shower are you going for now? If it is a thermostatic mixer as opposed to an electric one it will mean one extra pipe. you will save money if this is the case as sparks will not have to use/run heavy cable back to fuse board. I assume you are buying power shower or external pump?

 

[sfag]

Theory versus reality.

There is no such thing as fixed price, whether you go direct labour or with a builder.
There are no such things as an enforceable penalty clause for breaching a fixed price.
Tradesmen do not provide written specs as they do not stick to them anyway.
There are agreed prices which are all subject to change.
They all whinge like mad.
They have a life time of experience at justifying money demands.
You have no experience at rebuttal as you do not know the trade in question.
Your strongest bargaining time is when they have done more work then you have paid them for.
A price not agreed before hand will be always higher than you expect
Verbal communication is always misunderstood.
Written communication is always misunderstood.
Standing and point will be misunderstood.
In a complete house build you have to be on site every day at every turn to avoid mistakes which you will pay for.

You have three choices.
1. Refuse to pay - in which case they walk off the job and leave you worse off then you had paid. Remember you hired them because there quote was low. The next guy will be higher but maybe no better.
2. Pay for their mistakes with without much debate in which case you get the job done in time.
3. Fight tooth and nail over every penny – if you mind confrontation.

I chose number 2 even though I'm fine with confrontation.

The previous posters advice will not apply as they are talking about one off small jobs. Different story on a house build.

 

[sydthebeat]

Theory versus reality.

There is no such thing as fixed price, whether you go direct labour or with a builder.
There are no such things as an enforceable penalty clause for breaching a fixed price.
Tradesmen do not provide written specs as they do not stick to them anyway.
There are agreed prices which are all subject to change.
They all whinge like mad.
They have a life time of experience at justifying money demands.
You have no experience at rebuttal as you do not know the trade in question.
Your strongest bargaining time is when they have done more work then you have paid them for.
A price not agreed before hand will be always higher than you expect
Verbal communication is always misunderstood.
Written communication is always misunderstood.
Standing and point will be misunderstood.
In a complete house build you have to be on site every day at every turn to avoid mistakes which you will pay for.

You have three choices.
1. Refuse to pay - in which case they walk off the job and leave you worse off then you had paid. Remember you hired them because there quote was low. The next guy will be higher but maybe no better.
2. Pay for their mistakes with without much debate in which case you get the job done in time.
3. Fight tooth and nail over every penny – if you mind confrontation.

I chose number 2 even though I'm fine with confrontation.

The previous posters advice will not apply as they are talking about one off small jobs. Different story on a house build.

terrible advice if you dont mind me saying....

 

[DavyJones]

The previous posters advice will not apply as they are talking about one off small jobs. Different story on a house build.

Do you refer to me? In which case I was talking about a house build. You got one thing right, self builders generally don't have a clue, why would they? if your not up for it hire a project manager/QS and let them do their job. they will worry about budget on your behalf and will make sure everybody knows exactly what they must do for the fee they charge.

 

[joker538]

Do you refer to me? In which case I was talking about a house build. You got one thing right, self builders generally don't have a clue, why would they? if your not up for it hire a project manager/QS and let them do their job. they will worry about budget on your behalf and will make sure everybody knows exactly what they must do for the fee they charge.

I agree with the above. There seem to be a lot of self builders complaining they cant/dont know how to handle subcontractors yet fail to pay for professionals to do the job for them.

 

[mf1]

"if the build is planned properly, and supervised properly.. theres no chances of extras arising!!!"

"if your not up for it hire a project manager/QS and let them do their job. they will worry about budget on your behalf and will make sure everybody knows exactly what they must do for the fee they charge. "

I think the above comments really say it all. I am always amazed at people on this board talking about direct labour and self builds when it is abundantly clear that they have no expertise or experience in doing it.

Having gone through a relatively major renovation job some years ago and having been blessed with the most wonderful builder and architect ( both chosen on a lucky break basis only) and ultimately increasing our budget by about 35% to accomodate all the extras/changes/additions that only became obvious during the course of the work, I think that unless you are very experienced/very thorough and know to the most infinitesmial detail precisely what you want that increases during the build are almost inevitable.

mf

 

[sfag]

You wont be surprised to hear that I dont agree with the others.

1. Architects charge 10% of the estimated build cost - thats too much. 18 grand for basic planning permission drawings / 50 grand for detail drawings and 6 stage inspections.
2. engineers charge much much less - say 4 grand for detailed drawings that a builder and tradesmen can work of.
3. These days people generaly design their own house in their head and just need someone to do the drawings. - use an engineer or technician.
4. The structural numbers - the most vital info on the plans - come from a structural engineer - not an architect.
5. Project management costs way too much. You will end up standing on site pointing out the bits that they have missed to the builders.
6. QS costs about 1.5 - 3% and is a pointless spend for a house build as no builder will use them

Architects, Project managers & QS's will add 80 grand+ to a 420 grand build cost. Thats a big extra and not money well spent. And they all make avoidable mistakes. People overestimate their (the experts) professionalism and under-estimate their own intuition.

Anybody self building will be trying to save costs so it pointless scolding them for not using expensive experts.

 

[sydthebeat]

You wont be surprised to hear that I dont agree with the others.

1. Architects charge 10% of the estimated build cost - thats too much. 18 grand for basic planning permission drawings / 50 grand for detail drawings and 6 stage inspections.

2. engineers charge much much less - say 4 grand for detailed drawings that a builder and tradesmen can work of.

3. These days people generaly design their own house in their head and just need someone to do the drawings. - use an engineer or technician.

4. The structural numbers - the most vital info on the plans - come from a structural engineer - not an architect.

5. Project management costs way too much. You will end up standing on site pointing out the bits that they have missed to the builders.

6. QS costs about 1.5 - 3% and is a pointless spend for a house build as no builder will use them

Architects, Project managers & QS's will add 80 grand+ to a 420 grand build cost. Thats a big extra and not money well spent. And they all make avoidable mistakes. People overestimate their (the experts) professionalism and under-estimate their own intuition.

Anybody self building will be trying to save costs so it pointless scolding them for not using expensive experts.

1. i agree thats too much, but theres plenty of architects out there who will give the same serviec for less than that 10%. Alas theres also a lack of understanding as to what the architects actual roles is. If the client wants to be very 'hands on' with the project then yes, theres no point hiring a professional to manage the project.

2. engineers are not trained or educated (or, generally have the vocation and talent) to design a dwelling properly or artistically. architecture is a form of art and not everyone can do it, or appreciate it. You are not comparing like with like here.....

3. that very reason is why we have a counrtyside bilghted with monstrosities. Why do people think the can deisgn their own home??? I dont walk into a car show room and say i want the front bumper of a bmw, a bonnet of a ford, the sides of a bugatti and the engine of a volkswagon... so why do people think the can design dwellings with the generic bay windows, a bit of stone, a splayed conservatory, a curved stairs and grecian columns... i mean, come on!!!!!! Its advice like that above that leads to badly designed houses, badly functioning houses and consequently unhappy inhabitants...
Theres a distinct lack of respect for the services a good architect can give.

4. every professional input is equally important... its a team effort.

5. if you have to do this then you have not hired a good project manager. If you also have no construction experience how do you know whats missed and whats not.... if you are good enough to do thi sthen you dont need to hire a project manager. Specialisation of services leads to higher standards..... 'jack of all trades' type leads to lowest common standards.

6. if a builder used them, as he would have to do on a proper build, they there would be quabbling about unagreed 'extras' etc. It leads to a much more smooth running projct and also ensures standard of materials used as they would be specified before the build commences, and not left to the builder to choose, who would invariable choose the cheapest product to use. The OPS situtaion wouldnt have occured.

you last comments about trying to save costs by not using professionals is just down right ridiculous, because it is well accepted that by using professionals you will save money in the long run and also get more from your budget than without!!!!

 

[pudzer]

it is well accepted that by using professionals you will save money in the long run and also get more from your budget than without!!!!

Sydthebeat,

I rarely disagree with your comments however, on this occasion, I feel that your quote above is applicable to those in the construction industry alone. I know many people who have completed direct-labour builds and ended up with more than satisfactory homes.

I am a qualified Project Manager however, not in the construction industry. I have twenty years experience at planning, budgeting, delegating tasks, organising schedules, etc. Each new project that I undertake within my own profession has many many elements that I know little or nothing about due to changing ebvironments and new expertise.

Similarly, in the construction industry (which is the industry that Project Management evolved from), things change on a daily basis and nobody is an expert in every area.

My original posting has lost its focus (but that's okay!). In my industry, we are asked to tender for jobs. We receive a "Request for Proposal" and have a set time wherein we can ask the potential client as many questions as possible about the project which we will tender for. We then explain in writing what we will complete, in a set time frame and for a set price.

I am finding in the construction industry (with or without a recession) that a 'fixed price' invariably becomes a variable price as the job goes on. It annoys me! I rarely, if ever, accept the lowest quotation. I always agree in writing what is to be completed. I hired a QS upfront to provide a detailed schedule of materials.

I am bewildered at the construction industry. There are some very very genuine guys out there who are proud of their work and really want to do their best for you. BUT, there are way too many gangsters out there that couldn't give a toss and are only interested in getting into your house, doing as little as possible in as short a time as possible for the biggest price that they think they can squeeze out of you.

End of rant..................for the moment!

 

[DavyJones]

I am bewildered at the construction industry. There are some very very genuine guys out there who are proud of their work and really want to do their best for you. BUT, there are way too many gangsters out there that couldn't give a toss and are only interested in getting into your house, doing as little as possible in as short a time as possible for the biggest price that they think they can squeeze out of you.

End of rant..................for the moment!

If you are not happy with a sub-contractor, why not get rid of them?

Well written post BTW

 

[sman]

You wont be surprised to hear that I dont agree with the others.

1. Architects charge 10% of the estimated build cost - thats too much. 18 grand for basic planning permission drawings / 50 grand for detail drawings and 6 stage inspections.
2. engineers charge much much less - say 4 grand for detailed drawings that a builder and tradesmen can work of.
3. These days people generaly design their own house in their head and just need someone to do the drawings. - use an engineer or technician.
4. The structural numbers - the most vital info on the plans - come from a structural engineer - not an architect.
5. Project management costs way too much. You will end up standing on site pointing out the bits that they have missed to the builders.
6. QS costs about 1.5 - 3% and is a pointless spend for a house build as no builder will use them

Architects, Project managers & QS's will add 80 grand+ to a 420 grand build cost. Thats a big extra and not money well spent. And they all make avoidable mistakes. People overestimate their (the experts) professionalism and under-estimate their own intuition.

Anybody self building will be trying to save costs so it pointless scolding them for not using expensive experts.

Firstly, let me just say...I'm sitting here with on a Sat night with X-Factor on the telly looking up construction websites...My god I'm getting old!

Readin this thread with interest....Just to comment on the above..... I started out with the idea that i would design my own house, (cause I knew exactly what i wanted of course). I soent months scribbling on bits of paper and trawling the internet for ideas. I hired an engineer to draw it up, then about a year later, paid him off and hired an architect to design a house from scratch. I have ended up with a brilliant design which we have got full planning for and are delighted with. I have come round to thinking it is by far the most important part of building a house, having initially thought of it as a minor inconvenience before laying the foundations. I have a fixed price of 11k from the architect to go through the build completely. 4k for initial design, 4k for working drawings and tendering/contracts etc., then 3k for signoffs/inpections. We gave a basic spec of what we wanted and left him off. The final design is very close to his initial scetch and incorporates more design ideas in the hallway than in our complete design.... When spending such a large amount of money building something, the most important thing in my opinion is that what you are actually building is a high quality design as it costs as much to build a poor design.

I admit i chuckled when i read Sid's comment on mostrosities with "generic bay windows, a bit of stone, a splayed conservatory, a curved stairs and grecian columns". My own perfect design incorporated a number of these.

The architect is now getting a structural engineer to look over the drawings, and we will probably now get a QS(friend of ours) to look at them to get a handle on quanties required, which will help when getting quotes from trades.

For the build, we are going to go down the project manager route. I see this as the half way point between a full contractor and doing it myself(again, I had ideas in the back of my head initially that i could do it myself). I will vet the project manager we choose fully and check previous jobs, so hopefully we should end up with someone who knows what he is doing. I think having someone with far more contacts than me in the trade, who knows what he is looking at on site, and who will take the calls from tradesmen (when I am doing my day job to pay for the thing) is well worth the fee.. (between 25/30k)


As to how I'll get on with trades giving prices, and then adding extras... we will see. Hopefully quotes based on detailed construction drawings and QS report will be more accurate. Can i specify something in tendering for quotes to minimise the risk?

now...back to x-factor