Tender pack for a 4-unit residential project in London
A developer had negotiated with a contractor without the aid of a quantity surveyor, which led to a drastic increase in costs and a very delayed start on a four-unit residential project in London.
We assessed the quoted figures to determine their accuracy. We then created a full tender pack for the project and negotiated with contractors to get the best price and ensure that delays were reduced.
The project is now underway for a reduced cost and with minimal delay, saving the developer £250k
A closer look at our approach
We were contacted by a developer who had been referred to us by an architect. The developer was working to deliver four residential units in London with a budget of £800,000.
The architect had suggested the contractor hire a quantity surveyor to put together a tender package and contract due to the current cost volatility. From their experience, the artichect thought that this would help to avoid the escalation of costs during construction.
The developer was not sure they needed a tender package or contract prepared by a quantity surveyor as they thought that it was only adding to the project costs. They had not used a quantity surveyor for previous projects, which had smaller budgets, and have instead negotiated with only a basic contract in place.
A contractor had already been instructed to carry out strip out and enabling works for the project and the developer was negotiating the full build cost with the contractor, confident that this would be within budget. We left it like this, with the developer moving forward with negotiations with the contractor, aiming for a June 2022 completion date.
Four months later, we were contacted again by the developer. The contractor on site had carried out the enabling works while assuring the developer that the budget for the entire project would be met.
However, when the construction drawings were issued, the contractor increased their price to £1.09m, claiming additional substructure detail costs, finishes costs, which had allegedly not previously been included in the estimate, and general increases in construction costs.
We took a detailed look at the quoted figures to assess if they were accurate. It appeared as though some of the costs had been inflated, while the quote also contained ambiguities that could lead to additional costs.
We advised the developer that the project should go out to tender, even though this would delay the on-site start by six to eight weeks. At this point, they had already lost three months due to extended negotiations and was on track to come in over budget and lose money on the project.
Once this route had been agreed, we prepared a full tender pack, including a bill of quantities, contract conditions and specifications, which was ready within two weeks. This was sent to four contractors and within three weeks we had three fixed cost quotes ranging from £840k to £1m.
We negotiated the quotes further with the two lowest contractors and in late October, a contract was signed to deliver the project for £840k. Works were then able to start in mid-November with the completion date set for July 2022.
Overall, we were able to reduce the delay to the project to just one month while also saving the developer £250k, helping to avoid them losing money on the project. They are happy with the outcome and believe that this result fully justifies our fee.
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