Once you have a design for your new home or renovation, many people simply jump into choosing a builder. This can work if your extremely lucky and get that one in a million fairly priced, honest and available builder that will also build with rapid speed. Rare in my experience. Choosing your builder is equally as critical as your choice of designer, yet there is little guidance on the process to ensure that your project scope of works and inclusions are effectively documented and clear to enable a builder to know exactly what to include in their build quote.
This stage is called the tender process and is imperative before getting to site whether you are embarking on a custom new build, home additions or alterations. The tender process checks the builders’ capabilities, enables you to get “apples for apples” build quotes and truly know “what is” and “what is not” included in your build contract. A professionally administered home building tender process will bring to the surface any ambiguity in the plans and uncover any hidden costs that builders may not tell you about unless they were asked. In essence, it helps prevent mistakes, stress and additional costs when you are on site.
If you are looking for a professional to run a tight tender process to safeguard you during your build, feel free to get in touch via email to john@homebuildingadvisor.com.au
Servicing Sydney’s Inner West, Eastern Suburbs, Northern Beaches, Inner City, South Sydney (Bayside Council), North Shore and The Hills Shire.
What goes into an effective home building tender
1. Prepare a detailed Scope of Works
A home building scope of works puts to words what is on the plans and expected to be allowed for by the builder. It should also identify any specific items that you need to execute the works, even if they are not clearly shown on any plan. This is a must have for custom homes, renovations and home additions.
This document is quite detailed and best done by a licensed home builder that knows what to look for and include. A scope of works details all items to by included within the build contract price. It covers all items from Demolition, Excavation, Termite Protection, Concreting, Timber Framework, Brickwork and all the way to the final clean and expectations for rectifications of defects upon completion.
Items that are not included in the Scope of Works, are altered or required throughout the course of the project are a variation to the contract. This will incur a further builders margin and mark-up often totaling between 20-30% over and above the cost itself. So best to include as many of those items within the initial tender phase when the builders are keen to win your business.
2. Prepare a schedule of Provisional Allowance and Prime Costs Items
Make a budget of how much you want to spend on fixtures and fittings such as kitchen joinery, tiles, timber flooring etc. Also make allowances for items that are expected but cannot be quantified from the outset. When assessing builders on their price, beware of the provisional and prime cost values in their quote. Quite often, it’s not the cheapest overall quote that is giving you the most value. Our Guide to choosing the right builder delves into this further.
3. Outline Project Preliminaries
The general preliminaries in a building tender include the various ancillary items, tasks or fees that the builder should identify. They should outline “what is” and “what is not” included in their price or otherwise states who pays for what items. These preliminary items are necessary for the builder to complete the works, but will not actually become part of the works. For example, site supervision, scaffold, cranes, bins etc. The preliminaries should also outline if the cost of Council fees, Consultants or private certifiers fees are to be paid for by the builder or by the client.
4. Double Check your plans
Check through all plans for consistency and accuracy and collate all documentation for builders to quote from. Its important at this stage to look for any items that may not be shown on the plans and should be included in the scope of works. Quite often items such as retaining walls, works to an existing portion of a building, impacts to neighbouring buildings, sewer encasement or diversion works are often excluded from the initial plans and should be allowed for in the scope of works.
5. Select Builders to Quote
Choose 3-4 builders to quote and check that they would be suitable to undertake your home building project. Check how long they have been in business, are licensed, carry insurance, have relevant experience to your specific project, check for red flags such as license cancellations or warranty claims and their availability to start. Ask to visit one of your builders current or previous projects and if they’d be happy for you to visit their home. This is where you can check for evidence of a well-organised, clean and safe site and also check for quality.
6. Compare Quotes
Well written tender documents should enable multiple builders to quote on an apples for apples basis, therefore making it easier to compare prices and inclusions. It’s a great exercise to have an independent builder or client side project manager to compare your builders quotes. If you get a quote directly from a builder, always look at the inclusions for each line item in their tender and what they have excluded. Also look at the Provisional Allowance differences between builders.
7. Progress Payments
Your builder, bank or client-side project manager will set the project payments schedule. The benefit of the payments schedule being drafted by an independent project manager is that it ensures the payments are made in line with estimated true value of the construction at each point in time. If a bank is funding the project, they would usually set the payments schedule or offer guidelines to keep to. They may also appoint a Quantity Surveyor to assess the progress at each point in time.
Feel free to get in touch for if you need help in selecting a Builder for your new custom home or home addition in Sydney’s Inner West, Inner City, Eastern suburbs or Lower North Shore. I run a comprehensive tender and builder selection process that will ensure you get what you are paying for.
Contact me on john@homebuildingadvisor.com.au
Happy Building!!!
Sample Scope of Works
The sample is only an excerpt of the 1st two sections of a typical scope of works document for an alterations and additions project in Sydney. In essence, since many plans do not include all the items you may need in a build, you need to tell the builders exactly what to quote for, and include this as part of your contract.
General Project Preliminaries
Public Liability insurance to the value of $20M
Construction works insurance to the value of the project
Home Building Compensation Fund insurance and brokerage fees (Home Warranty)
Heritage or existing structures insurance
Site establishment and ongoing maintenance
Site toilet and staff amenities
Site fencing, plant, machinery, scaffolding, cranes
Traffic management
Dust and vibration control
Work, Health and Safety Management
Anti erosion and sediment control
Skip bins and progressive site cleans
Final clean up
Surveyor – set out surveys, final survey and WAE
Structural Engineer – inspections and certificate
Stormwater Engineer – inspection and certificate
Other consultants – reports, inspections and certificates eg. Arborist, Acoustic, Landscape designer, Heritage, Fire etc
DA fees, CC fees, Private Certifier fees, Long Service Levy, council fees, bonds, applications and permits
Water disconnection – meters
Electrical disconnection – meters
Gas disconnection – meters
Demolition
The Builder is to remove all debris from works carried out in accordance with the contract from the site and dispose of in accordance with AS2601, the Council Conditions of Consent and the regulations of all relevant statutory bodies.
The Builder is to allow for the following within their fixed price:
Site Clearing, Tree & Vegetation disposal to execute the works
Tree Protection as per arborist report
Demolition & Disposal of elements as shown on plan to execute the works
Temporary roof covers, bracing & support for parts of existing structure during the works
Asbestos removal & disposal: Remove visible asbestos to eaves and outbuilding
The Builder is to protect the following:
1. Granny flat and pool to the rear of the property
2. Side And rear boundary fences
3. Existing timber flooring and tiles in areas that are to remain
The Builder is to allow for the demolition and removal of all elements as shown on plan, as required to complete the works, and as stated below. The demolition works shall also include the following:
4. Concrete from existing internal and external slabs, footings, paths, vehicle crossover, layback and driveway
5. Remove all concrete to both sides of the house
6. Demolish brickwork, framework or cladding from walls that are shown to be altered or removed as shown on plans.
7. Remove all existing roof tiles and remove from site.
8. Remove floor structures that are affected by the works.
9. Allow for a complete strip out of plasterboard, tiles, flooring, skirting, architraves, doors, wardrobes
10. Strip out and removal from site of existing kitchen as shown on plans,
11. Strip out and removal from site of existing bathrooms or wet areas as shown on plans.
12. Disconnect, cap off and remove and dispose of hot water system, solar system, AC system
13. All windows and external doors
14. Metal shed, pots and gardens including rockery to South side of house
15. Strip out of all internal flooring including joists to existing portion of home
16. Strip out of existing bathroom flooring and 2 internal brick walls at bathroom
17. Removal of concrete to front patio, slab beyond the patio and footpath to front gate
18. Strip off all render within the existing walls so that plasterboard can be securely fixed to brick walls
Feel free to get in touch for if you are interested in running a professional tender process when embarking on a new custom home or home addition in Sydney’s Inner West, Inner City, Eastern suburbs or Lower North Shore. I run a comprehensive tender and builder selection process that will ensure you get what you are paying for.
Contact me on john@homebuildingadvisor.com.au
Happy Building!!!
