Why do contractors always seem to charge more than their estimate?
Well, the clue here is in the last word of the above headline – `estimate’! Dictionary definition: approximation, estimation, guess, guesstimate, ballpark figure. In other words, no better than an educated guess. (And not even that sometimes!)
So what can the average office fit out or office refurbishment manager do to protect themselves – and/or their company – from falling into this potentially disastrous (and costly) scenario?
Prepare a well written `Scope of Works’
The absolute first thing to do is to compile a detailed and accurate `Scope of Works’ or `Schedule of Works’ for the work required. It doesn’t have to be too technical Office fit out company at this stage but it should contain detailed descriptions of each element of the work that needs doing so that each contractor on your tender list has exactly the same information on which to submit a fixed price.
Here are a couple of examples:
“Item 1: Existing office partitions
Carefully dismantle existing aluminium framed solid full height demountable type partitioning to General Offices & clear from site (including 1 no. door & frame)
Item 2: Existing office furniture.
Carefully dismantle as necessary all existing office furniture to General Office & clear from site.
Item 3: Making good
Make good to existing floor, wall & ceiling surfaces and finishes following dismantling works to best results.”
Avoiding The `Tender Trap’
Once you have a written the entire `Scope of Works’ in this fashion the next thing to do is compile a short `tender list’ from a list of contractors who have either been highly recommended by someone you know well – and whose judgment you trust – or from among contractors whom you know have previously carried out very similar work of the type and size as yours. (There’s not much point approaching very large contractors if your project is minuscule relative to their size and turnover -they probably wouldn’t be interested anyway!)
On the other hand you don’t want to be dealing with a `one-man-band’ working out of the back of a white van either! So, where possible, try to match the `tendering contractors’ -no more than three or four -with the size and type of your project and their proven skills & experience in this field.
Then, invite each contractor on your tender list to submit a “fixed price lump sum” for the work you have described in your `Scope of Works’. (The reason it’s called that is that you want to leave room for a conscientious and experienced contractor to submit alternative suggestions which may either save you time and money and/or be of a better quality.)
How To Properly Compare The Tenders
Finally, once you have received back all of your tenders, carefully go through each one with a `fine tooth comb’ comparing the cost for each item against one another. (If you’re not sure whether an item has been included or not simply `phone the contractor and ask.) But ALWAYS, ALWAYS make sure that you get WRITTEN confirmation of any amendments and/or additions to the tender as a result of your call!
Underbidding – Caveat Emptor (Buyer Beware)
Having received all the tenders back and gone through them with a `fine tooth comb’ to ensure that everything has been included and priced correctly, a savvy fit out or refurbishment manager still needs to be aware of the increasingly common practice of `underbidding’.