building an extension - fixed price or hourly rate

linda_brew

OH wants to build an extension.

he wants to ask some builders around next week for some estimates. should we ask for a fixed price and/or daily rate?

OH is a project manager (albeit not construction) and works from home and wants to manage the project.

what are the pros and cons of this? any questions we should definitely ask the builders visiting?

Errata

I've never paid builders, or any other trades people, an hourly rate - I don't fancy them taking as long as they fancy to do the job.
Can't answer your question about project managing as it's not very specific.

macman

I can't think of any possible pro's. It's like signing a blank cheque.
Why would you even consider paying per day?

wonka

Don't pay hourly unless you have lots of experience in the construction industry.

How would your OH know if a contractor was stretching work out? If he asked a contractor to estimate a job, how would he know if it was a reasonable estimate?? He wouldn't would he?

Just get a few fixed price quotes instead.

AdmiralX

linda_brew wrote: »

OH wants to build an extension.

he wants to ask some builders around next week for some estimates. should we ask for a fixed price and/or daily rate?

OH is a project manager (albeit not construction) and works from home and wants to manage the project.

what are the pros and cons of this? any questions we should definitely ask the builders visiting?

Depends on the size of project. If you do the ext on fixed price, try and get detailed description of work, materials and practices. Some people pay a surveyor to supervise if the job is biggish. It may cost but may guarantee the finished product.

you might try to google how such a job should be done and the planning.

Hejo

Check here http://www.buildingsheriff.com/extensions/ and you may also find the housebuilder's bible by Mark Brinkly helpful. Speaking from bitter experience do not take anything at face value! And definitely don't go with an hourly rate!

WLM21

AS stated above get quotations (not estimates)

.. then, once everything starts do not change anything, regarding plans, dimensions etc etc, because that will give the builder a chance to work per hour and those rates are always high.

SO A FIXED PRICE FOR A FIXED SPEC (SPECIFICATION)

keystone

Daily rate is a licence to print money - forget it.

A quotation is at contractors risk albeit that they will quite rightly include a contractual clause concerning unforseen circumstances because there will be some and you will change your mind about the agreed specification/scope at times. Such changes which will include the "I can do it a bit better this way" scenario brought on by the builder should be covered by a Variation To Contract Clause which requires changes to be agreed on paper together with a statement of agreed increased or reduced costs as a result. The must be done BEFORE additional work or changes to spec are started.

An estimate is very much at clients risk although contractual protection such as outl;ined above can be included here as well.

Not doubting your OHs skills and capabilities as a PM for one single moment your relationship with your builder should be strictly on a client / contractor basis. The minute he starts to try to Project Manage then the builder will get up tight over "interference" and the relationship will start to deteriorate. Whether he works from home or not he should not attempt to Project Manage. He has enough to deal with in his day job and one or either will suffer. Sorry if thats blunt or a dent to his ego.

If you let the builder know in advance that such is his profession then firstly the price will get loaded for the "interference factor" and secondly you are already paying the builder to project manage the trades - so let him get on with it.

Just my 2 cents.

Cheers

Jaynne

WLM21 wrote: »

AS stated above get quotations (not estimates)

.. then, once everything starts do not change anything, regarding plans, dimensions etc etc, because that will give the builder a chance to work per hour and those rates are always high.

SO A FIXED PRICE FOR A FIXED SPEC (SPECIFICATION)

I can most heartedly agree, always go with fixed price and don't change the design half way through.

I'm a software engineer and say the exact same thing to my clients. When you're getting quotes and working out prices that is my time but if you change it half way through I'm billing it as your time. Also I've probably booked work starting after your project so additions are billed at my standard hourly rate to compensate for any over time and delays in starting the next job.

DVardysShadow

keystone wrote: »

... Not doubting your OHs skills and capabilities as a PM for one single moment your relationship with your builder should be strictly on a client / contractor basis. The minute he starts to try to Project Manage then the builder will get up tight over "interference" and the relationship will start to deteriorate. Whether he works from home or not he should not attempt to Project Manage. He has enough to deal with in his day job and one or either will suffer. Sorry if thats blunt or a dent to his ego.

I agree with the thrust of this, but to take the edge off it, there may be some scope for savings if you contract separately with different trades to do different tasks. In which case there will very definitely be a need to project manage. But the management should definitely be 'project' and not 'micro' management. ie it is managing the interactions between the trades, not how anyone does their own job.

keystone

DVardysShadow wrote: »

I agree with the thrust of this, but to take the edge off it, there may be some scope for savings if you contract separately with different trades to do different tasks. In which case there will very definitely be a need to project manage. But the management should definitely be 'project' and not 'micro' management. ie it is managing the interactions between the trades, not how anyone does their own job.

Thanks for that and you are correct to a certain extent IMHO. I know I'm looking very much on the black side (and that is, after all, the essence of mitigating contractual risk - the old "if anything is going to go wrong it will" scenario) of things. Two PMs though will lead to conflict unless they are joined at the hip on the project which is time consuming and IMO nugatory from a cost saving perspective. If OH wants to do it that way then he should PM in entirety and contract direct with the trades concerned for each parcel of work and leave a builder out of it. That will be a full time job though and the one he is paid to do will suffer.

OP - Feel totally free to disregard my nonsense of course if yours and OHs gut reactions are that I'm wrong.

Cheers