Methods of Managing a Building Project
We at Aaron Intec Associates believe the client's interests and wishes are paramount. You should be in complete control of how your money is being spent, and in charge of all key strategic, project and design decisions. Above all, you should know that you are being supported by a team of professional and commercial partners who have accepted complete ownership of the project on your behalf.
We believe that to achieve this, a clear line of authority needs to be established; a manager who has total authority over project matters, with whom the client establishes a strong bond of trust, and through whom the client passes all their instructions and administers all contracts.
This is no small 'ask' when you have little specialist construction knowledge, and even less time to make such things happen.
Should you elect to, we will work with you to put into place a design, management and supervisory regime, which suits your requirements exactly.
In practice, there are any number of ways this can be achieved.
As examples only, we have set out two popular options - electing a single ‘Main’ contractor who outsources to multiple specialist tradespeople and companies according to the needs of the job , and employing those same specialist tradespeople and companies directly, so cutting out the 'middle-man'. For simplicity, these will be referred to as the ‘Main Contractor, and 'Self-Build’ routes respectively. As a further reference, most of the projects featured on ‘Grand Designs’ are self build projects, with the exception of the much talked about ‘Huff House’ project which was designed, manufactured and erected by one company as a prefabricated kit. Using a single 'Main Contractor'
Should you elect the main contractor route, your chosen building company will manage the project under contract to you for a fixed price and specification. Once you have placed a contract, any and all changes, additions and variations to the specification contained in the documents which formed the basis of the building contract will vary your project (and contract) costs and program (contract time) accordingly. Cost control is achieved by asking the main contractor to tender against a bundle of documents (the building contract) which include a detailed Schedule of Works, Design & Construction Drawings, Engineering Designs and Calcs, and any other information on interiors, fixtures and fittings such as brochures and literature, which might inform him and help him to quote you his best price. The main contractor determines the level of overhead (project set-up costs usually referred to as 'preliminaries') and percentage mark-up he applies to the variable costs of the project (labour, specialist fabrications & materials). Overheads principally cover project related management costs, project set-up costs, access arrangements, workman's comfort facilities, site security, H & S issues (often referred to as CDM). Mark-ups cover site supervision, main contractor overhead and profit, and will be applied to all core, additional and the variation costs. Ultimately, the market place (regional supply & demand conditions) will determine your project cost. VAT is applied to the whole contract sum. We at Aaron Intec Associates will set up this whole process for you, and supervise it through to completion for you, should you wish. We would pay particular attention to ensuring you can exercise the exact level of control you want, over cost matters and design details, and that your best interests and requirements are being served at all times, in particular by ensuring all parties meet codes of best building (and professional) practice and all statutory responsibilities are being observed on your behalf.
There are many who will value the peace of mind offered by this approach.
Going the 'Self Build' Route
With the self build process you are the ‘main contractor’. You would be in charge of your own expenditure and budget. Risk and cost control are managed by comparing quotes with a professionally costed Schedule of Works before acceptance. You would spread your risk by asking a selection of contractors representing the principal trades and specialist components of the project to quote competitively before orders are placed. It is precisely the same approach which is adopted by the ‘main contractor’ to balance his own risk, except you have a greater opportunity to build a personal and contractual relationship with each subcontractor and/or specialist. You would achieve this by submitting the same detailed information, terms and conditions to them for pricing, instead of submitting it to the main contractor. The process is much the same as the main contractor route, but you can personally choose the tradesmen and companies most appropriate to your needs (i.e based on their specialisation and/or level of competitiveness) and your risk is spread more widely across many suppliers. Once you have placed your contracts, as ever, any and all changes, additions and variations to the specification contained in the original contract documents will vary your costs and program accordingly, albeit that you can exercise more control over both outcomes. The principle difference between this and the ‘main contractor’ route is
that the project does not attract any main contractor mark-ups, profits, overheads or management charges. You can determine your own level of management and project set-up costs
as well as the extent of day to day supervision, and you would buy
materials at rates negotiated directly with the merchant. Certain
smaller tradesmen and specialist fabricators may not be registered for
VAT.
This must be weighed against the self builder’s increased level of risk and contractual liability, especially in the areas of Third Party, Public, Employers
and H & S liability. To manage this risk, the self builder will
take out specialist insurance and normally employ an independent
professional project manager or architect to take key decisions on his behalf on design, construction, organisation and compliance issues. On larger projects, this will also entail the employment of a top-flight site foreman to supervise day-to-day site management, organisation and safety.
Electing the Self-Build route can equate to savings between 20% and 40% over the whole contract depending on its size and nature.
A particularly popular way forward is to combine the self-build route with employing a company under contract to deliver the project through to completion, who supply a foreman and principal tradesmen (‘core’ tradesmen employed from the very start of the project through to its conclusion) on either a fixed price or ‘daywork’ rates. This means that you are not paying for any ‘contingency provisions’, or overhead and profit margins on core ‘critical path’ work, and have a team at your disposal to ‘drive’ the program and deal quickly and effectively with changes and additions to the project which come up – making Variations to Specification is an area where costs can spiral rapidly out of control when traveling more conventional routes (i.e the 'Main Contractor' route). Ensuring Effective Management
In common with all approaches comes the recommendation to arrange effective professional management to provide you with an overview of the project at all times and deal with compliance issues, statutory authorities and communication issues between the parties on your behalf.
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