Contingency/Variations

[RichA]

What is a contingency for?

My builder recommends a contingency of 10% to cover any unforeseen issues that become apparent when intrusive work commences.

It could feel like a bit of a free ticket to charge me for works but fully priced into the job.

 

[acurachris]

to cover any unforeseen issues that become apparent when intrusive work commences.

You have answered the question in your post. When the builder quotes, they don't know what horrors are hidden under or behind something, whether the underlying timber/brick structure is good, whether other remedial work is required to complete the originally quoted job.

 

[RichA]

Sure, but it can then become a bit of a debate as to what could/should have been foreseen.

EG Remove and replace existing ground floor screed to provide consistent level for tiling. ££

What was expected?

 

[John D v2.0]

Will, if you have a designer and a detailed spec, then that's what is foreseen. If the quote is detailed, then that is foreseen, otherwise it becomes a bit of a guessing game.
You can ask for things like hourly rates for unforseen work to make sure there's no overcharging, and you can agree rates per extra metre of Foundation depth. But unless you spend thousands on trial investigations you won't get that certainty.
We spent about 10k on professional services and there were still unforseen structural works, but the se and builder were happy to respond to the builder.

 

[RichA]

Thanks. I think the contractor and I will probably not end up seeing eye-to-eye on what is foreseeable.

My spec included laying new flooring in existing areas & new extension, including taking up existing the existing flooring.

I guess I think it is foreseeable some preparation would be needed; and that it would not be so easy as popping off the existing tiles and laying new ones.

 

[KenGMac]

RichA, Good evening.

Such "clauses" exist in most if not all contracts of this nature.

In effect it is a "get out clause" as far as the specifier / estimator is concerned, it was / is used as a way of keeping the contract working whilst "discussions" about the cost of the unforeseen work continues .

I would suggest that you inform your Contractor that you MUST be informed as soon as the Contractor is aware of a "Potential" use of the funds ring fenced as a contingency, this must be in writing, e mail Etc. so you can make a decision as to whether you consent to the expenditure of YOUR funds?

Ken.

 

[noseall]

We are building a large extension at present and have just completed all the ground works. When we dug the oversite off it was discovered that the existing building has zero foundations and the footing step-out brick is only just below ground level.

It has caused all sorts of headaches, not least of which is that none of the new floor or roof elements can now borrow any support from the existing dwelling as planned. The upshot is another £5k in additional (unforeseen) costs to the customer. If that is the only hiccup on a £108'000 job then we're ok.

The first floor Posi-Joists we are having to fit are 420mm deep! An increase from (original price) £1440 to £2880.

 

[RichA]

Noseall,
I am ok with that, as it is a reasonable expectation that he existing building has sound foundations. It is or the ones where the ‘variation’ could have been foreseen.

I guess there is risk in any project. So it’s how do you decide in a fixed price job who bares the consequence of that that risk.

 

[noseall]

I guess there is risk in any project. So it’s how do you decide in a fixed price job who bares the consequence of that that risk.

The customer ultimately pays for everything. The more detailed the drawing the more detailed the quote. Vague drawings/specifications deserve ambiguous quotes. I am uber-conscious about extras transparency and list the hours and materials and agree a fixed hourly rate should any extras crop up. Extras should ALWAYS be discussed with the client first.

 

[noseall]

Noseall,
I am ok with that, as it is a reasonable expectation that he existing building has sound foundations. It is or the ones where the ‘variation’ could have been foreseen

Possibly.

The crux is that the quote was based upon the architects design which assumed the exiting building had 'normal' foundations. The reality is that has now changed. It is possible to predict everything with enough research. You will however, pay more for this than you will for extras.

 

[RichA]

The customer ultimately pays for everything. The more detailed the drawing the more detailed the quote. Vague drawings/specifications deserve ambiguous quotes.

I think we differ (slightly) on this in that I don't think the contractors profit should be totally specifically ringfenced (I expect him to run a profitable business; some jobs will make more money, others less).

The JCT contract has a clause (D.4) that says "The price also includes the contractor's costs of dealing with unexpected problems which he could have discovered by carrying out careful inspection before the price was agreed."

 

[noseall]

he could have discovered by carrying out careful inspection before the price was agreed

You will however, pay more for this than you will for extras.

 

[noseall]

The JCT contract has a clause...blah...blah...blah....

Us builders have a clause too. Any unforeseen extra work that crops up - the customer pays for it.

 

[wessex101]

Thanks. I think the contractor and I will probably not end up seeing eye-to-eye on what is foreseeable.

My spec included laying new flooring in existing areas & new extension, including taking up existing the existing flooring.

I guess I think it is foreseeable some preparation would be needed; and that it would not be so easy as popping off the existing tiles and laying new ones.

Well if you are going to have bad specification clauses like that you are asking for trouble. If you think there will be an element of preparation and making good once the old floor covering is lifted then say so in the specification. Under your wording I think you might struggle to rebuff the contractors claim for extra making good, and of course once it becomes an extra it is always more expensive than if it was included in the original tender/quotation when the pencil was nice and sharp.

 

[noseall]

and of course once it becomes an extra it is always more expensive than if it was included in the original tender/quotation when the pencil was nice and sharp.

Not necessarily. I always make more money on price work rather than day rate.