I’ve Got My Quotes — What Next?

Your plans have been drawn up, planning has been granted, the builders have priced the project and now all the tenders have come back.

But the prices seem to vary considerably, the quotations are structured differently and there may be very little detailed breakdown. So how do you decide which builder is actually offering the best value?

If you have a Quantity Surveyor involved, they can prepare a tender report that breaks down exactly what has and has not been included in each quotation and gives you a much clearer basis on which to compare the contractors.

One of the most important things to remember is that the cheapest quotation is not necessarily the best quotation.

Compare What Each Builder Has Actually Included

You need to understand exactly what each contractor has included in their price.

Have the windows been priced in accordance with your specification? Has the contractor allowed for the supplier and product you expect, or substituted a cheaper alternative?

What allowances have been made for mechanical and electrical works? Are kitchens, sanitary fittings, flooring and other finishes included to the standard you expect?

A quotation may initially appear cheaper simply because certain elements have been excluded, underestimated or allowed for at a lower specification.

Pay Particular Attention to PC Sums

In many tenders or builders’ quotations you will see amounts identified as PC Sums.

A Prime Cost sum, or PC Sum, is an allowance for work or materials where the exact final cost has not yet been established. These allowances are commonly used for items such as windows, kitchens and fittings, plumbing and electrical works.

Builders may insert allowances without knowing the final scope or specification of those items.

This means PC Sums need to be compared carefully between quotations. A contractor can appear significantly cheaper simply because their allowances are lower than those included by another builder.

Your Quantity Surveyor can cross-reference these figures and identify where apparent savings may simply be the result of different allowances rather than a genuine difference in the cost of the project.

Check the Allowance for Finishes

Finishes are another area where quotations can differ substantially.

Some quotations may effectively cover the building shell and exclude flooring, wall finishes and other final finishes. Others may include only a basic specification.

If the specification is then clarified after construction has started, the contract price can increase considerably.

If you already know the type of flooring, finishes or other materials you want, provide that information when the project is being priced. This allows the contractor to include the appropriate specification from the beginning and gives you a much more reliable comparison.

Don’t Forget Landscaping and Site Works

Check whether landscaping and external site works have been included.

You may decide to exclude some of this work and complete it yourself at a later stage, but the important thing is that every contractor is pricing on the same basis.

For example, you should not be comparing one quotation that includes a fully finished driveway with another that provides only a basic stone-base driveway.

Make Sure the Specification Is Like for Like

Small changes in materials and specification can create significant differences in the overall price.

Roof finishes, insulation products, skirting, joinery and many other components can vary considerably in both specification and cost.

A contractor may have identified legitimate opportunities to reduce costs, and those alternatives may well be worth discussing. However, when initially assessing the tenders, you should make sure that all contractors have priced the same specification using comparable materials.

Only then do you have a genuine like-for-like comparison.

Agree How Payments Will Be Made

Another important consideration is how the contractor expects to be paid during the project.

Payments should relate to the value of work actually completed rather than simply being divided into equal monthly or fortnightly instalments regardless of progress.

There may be circumstances where deposits are required for items such as windows, plumbing equipment or other specially ordered materials. Where this happens, the requirement should be made clear and appropriate supporting invoices should be available.

Retention may also form part of the building contract, providing some financial protection should defects need to be addressed after completion. The exact arrangements should be clearly agreed as part of the contract before construction begins.

Be Ready Before You Appoint the Builder

Once you have selected your preferred builder, make sure you are genuinely ready to proceed before signing or confirming the contract.

Have your funding arrangements in place and make sure you understand any conditions that your lender may impose on drawdowns or final payments. If there are important lending conditions that could affect the contractor, make them clear before work starts.

You should also start finalising some of the major items that can affect the construction programme.

Windows can have a significant lead time, so these need attention early. Your kitchen design and supplier, sanitary fittings and other major items should also be considered well in advance.

Other finishes, such as flooring and wall finishes, can often be finalised during construction, but your builder needs sufficient notice of your preferred materials and suppliers.

Ask the contractor for key milestone dates so you know when particular materials, subcontractors and decisions will be required.

Finalise the Electrical Layout Early

Your electrical layout is another item that should be properly considered in advance.

Locations for sockets, switches, lighting and other wiring need to be planned before the relevant first-fix work is completed.

Leaving these decisions too late can lead to additional cost, disruption or delays, so go through the layout carefully and discuss your requirements with your builder and electrician.

The Cheapest Quote Is Not Always the Best Quote

Always read the detail of every quotation you receive.

Make sure the prices are being compared on a like-for-like basis, that you understand exactly what is included and excluded, and that you are comfortable working with the contractor you ultimately select.

Keep the expected completion programme in mind as well as the price.

The cheapest quotation is not always the best quotation. If something looks too good to be true, it often is.