There are many factors that are likely to influence or add to construction cost. Some of these factors are:
- Location & Site Access
- Unique design details & Finishes
- Availability of labour
- Market conditions
- Inflation
- Latent site condition
Below are some of the strategies to reduce the number of variations, and to have a better cost control during construction;
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Comprehensive working drawings
- During the tender stage, all potential builders should be provided with a good set of clear and thoroughly drawn working drawings. This is one of the most important documents for them to understand the scope of work. You should not leave anything out or have anything drawn in a way that can lead to different interpretation.
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Specification and fitting and finishes schedule
- Be specific with what you want and the level of result you expect. Have a good discussion with your Architect and ensure that everything that you wish to have are included and selected in the specification and schedule. Even if you aren’t entirely sure about it yet during the tender stage, include them as prime cost items or provisional sums.
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Do not have too many Prime cost & Provisional sum
- There is a risk of having too many price cost items and provisional sum. Running this risk can lead to a higher chance of variations. Over reliance on these estimates can result in inaccurate conclusions concerning the total contract price. This then remains subject to adjustment as each price cost or provisional sum is finalised. Besides that, they might be a long lead times to ordering of many specific building materials. It is important to clarify with the builder if the provisional sum includes all relevant materials and works associated with their installation or simply the cost of installation alone. Confirm that the contractor has allowed for installation of a price cost item yet to be selected.
It is vital to have an adequate amount of contingency sum. Each construction project generates its own difficulties which time will expose, and provision of contingency sum is a widely recognised mechanism to allow these to be overcome. For new works, the contingency sum should be in the order of 3% to 5% of the estimated cost of the work. For addition & alteration work, it could be up to 10% of the cost.
Howard Siow
Graduate
M.Arch (MELB) Hons, RAIA
BY Projects Architecture
09/07/2017
