There are two main approaches for managing a building project. Both have their pros and cons and can suit your individual needs depending on what you’re looking for in your building project.
By Andrew Cashin - Director
Do & Charge (or Cost-Plus) means exactly that — the client is charged for the actual cost of the project as the work is completed. The builder then adds a margin to that cost.
In this situation, the client and the builder work closely together to make all the decisions involved in the job. Rather than a confirmed quote from the beginning, the client is provided with an estimate for the cost of works to be carried out. Although this estimate does not include the same contingencies that a quoted project could.
During the Do & Charge process, the client is invoiced with smaller claims at regular intervals — usually once a week.
Each invoice includes a description of the works carried out including materials and contractors used. All supplier invoices are provided as part of these claims, so the client can see they are paying trade prices for materials.
This method of invoicing allows the client to keep an eye on how their project is progressing and their budget. However, the client could be drawn into believing they aren’t spending much if not well managed — those small claims can add up quickly.
The builder can often start the works almost immediately as the job doesn’t get held up with the need for a quote to be written, amended and signed off. The home owner then has more involvement and control of the pace of the project by only being charged for the work that is undertaken.
The client can have more say in the project, as opposed to a quoted job. This provides greater freedom and flexibility when choosing materials, fixtures and fittings but consequently means they must allocate more time in their lives to making such decisions. The same goes for clients who don’t have any plans for the works as it allows changes to be made on the fly.
Sometimes the client may also find it difficult to visualise what their completed project will look like. With Do & Charge work the client can make decisions at the right time before any major work is undertaken and can monitor the progress of their project along the way.
Choose Do & Charge approach if:
• You are looking to control the costs of your project and when they occur
• You’re after more flexibility during the build and want to have more of an influence over the pace of the project
• Visualising the completed project is proving difficult
In this case, the builder submits a quote for the cost of the entirety of the build before beginning the project. A comprehensive quote will include pricing from all contractors and suppliers and as a result can take around four weeks to be submitted to the client.
It should also be said that the accuracy of such a quote is always dependent upon the brief given to the builder. It is imperative that the client has a clear picture of what they want the finished project to be, as the builder can only allow for what has been requested.
The client is invoiced for the project via progress claims. These aren’t issued as often as Do & Charge invoices, but submitted to the client when a certain percentage of the works or a major stage has been completed e.g. demolition, wall framing, plumbing and electrical or painting.
By choosing the quoted process, both the client and the builder can be confident they understand each other’s expectations and have clarity about the cost of the project. This approach is favourable if the client has plans, drawn up by either an architect or a draftsman, to which the builder can analyse and quote to accordingly.
Should finance be required for the project, banks prefer a quote because they have confidence in knowing the agreed costs of the project.
It’s also worth keeping in mind that with a quoted project, the builder will make the final decision on contractors. The builder’s choice will generally be the most cost-effective. The advantage of this is that the builder has an ongoing relationship with their contractors, meaning there is no need for the client to act as a liaison between the contractor and builder.
If a client is time poor and doesn’t want the same amount of involvement as would be expected with a Do & Charge job, the set-and-forget nature of the quoted job is a good option.
Choose the Quoted approach if:
• You’re looking for a clear and concise project description knowing all the costs involved
• You know exactly what you want the finished project to look like
• You don’t have a lot of time to dedicate to the construction process