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Commercial Flexibility

For clients unable to visit the project regularly, we offer video updates showcasing progress within a specific timeframe. This enables clients to stay engaged with the construction process, bridging any geographical gaps and ensuring continuous involvement.

 

We understand the value of commercial flexibility. Having completed projects through a range of contracts, we understand the benefits and limitations of a wide selection of build methods. Here, we outline some of the different contracts we work with, yet we are always open to discussing specific contractual requirements.

Fixed Price Contract

Fixed price contracts, are simple and straightforward. Here, the contractor agrees to complete the project, to design provided by the client, for a fixed price, no matter the actual costs. This provides cost certainty to the client but places the risk of cost overruns on the contractor. In this contract type, the client’s design team retains full design responsibility. A detailed design should be prepared before the project pricing by the contractor. All additional costs due to unforeseen design issues fall onto the client’s shoulders, since they bear the design risk. The price remains fixed, provided the client’s team makes no changes to the design. The client maintains full control over the specification of works and finishes until the project’s end.

In summary, this typically requires a complete and detailed design before the construction work starts. This pre-construction phase can be time-consuming, resulting in a longer overall project schedule. However, once construction begins, the timeline should remain relatively fixed barring any changes to the design.

Design and Build (D&B) Contracts 

Design and Build (D&B) contracts combine design and construction services under a single contract. This approach streamlines project delivery and provides a single point of responsibility for both design and construction, potentially reducing the risk of disputes. The initial design is prepared by the client’s team, outlining the project’s requirements. The contractor takes over from this point, developing the design and committing to meet the specified requirements. With D&B contracts, the design responsibility and associated liabilities are transferred to the contractor.

A price is agreed upon based on the specified requirements. As long as these requirements remain unchanged, there is minimal scope for the contractor to incur additional costs. The contractor also assumes liability for many risks associated with site conditions. The client and their team control the set of requirements agreed in the contract. The contractor has the freedom to choose specific products that fulfil these requirements, with their flexibility depending on how well-defined the contract requirements are.

In summary, the D&B approach often results in a quicker overall project delivery time. This is because design development and construction can overlap, with the contractor starting the construction work while still finalising the design. This overlap of phases is commonly known as “fast-tracking” and can significantly reduce the project timeline.

Cost Plus

Here, design usually evolves as the works progress, with the client covering all the expended costs plus a contractor’s markup. The contractor carries minimal risk, as the client absorbs cost overruns and other unexpected expenses. This contract type offers an open-ended budget. The client should anticipate cost increases as they cover all actual costs plus the contractor’s fee. Typically, the contractor would provide an estimated bill of quantities with provisional sums to act as a guide for cash flow forecasts and target budgets. 

Flexibility in determining the final level of finish and making changes during the project is one of this contract types’ key characteristics. The Cost Plus contract allows for a flexible schedule as the design typically evolves alongside the construction process. This option typically enables a contractor to start on site earlier as they can start with groundworks packages while the rest of the construction information and specification is being worked on. However, this flexibility might lead to extended timelines if the design development or decision-making process becomes protracted. 

Management Contracts

Under these arrangements, the client hires a management contractor to oversee and manage works contractors for each package of the project. This arrangement can provide the client with greater control over individual work packages but requires a high level of management and coordination. This option has successfully been used as a hybrid of fixed price and cost plus, whereby the contractor fixes their overheads, profit and prelim costs while the client has flexibility over specification throughout the build. 

The Role of a Contract Administrator 

Many projects will have the construction contract, administrated by an architect or independent contract administrator/surveyor. We work with both and welcome either. Client supplied CA’s have the benefit of acting outside of any operational duties within the design team which has the benefit of impartial and subjective decision making but can add an extra cost to the client design team. The role of contract administrator can have varying degrees of administrative work depending on the contract selected.

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