Architecture / June 23, 2018 / .
Many construction projects involve the design and construction of a building which is tailored to meet the clients specific requirements. No two construction projects are identical - there is no such thing as the average building project. The cost of the building will depend on its particular characteristics and these are largely determined by the architect. The design options are almost limitless and the resulting costs can be difficult to forecast reliably in many cases. On the other hand, certain types of buildings such as schools have well established cost histories and are usually subject to a cost limit.
The payment arrangements adopted on a contract directly affects the level of risk borne by the contractor. Where the contract is let on the basis of a drawings and specification lump sum the contractor assumes the risk for both the quantity and pricing. In lump sum contacts based on bills of quantities and remeasurement contracts the contractor assumes the risk for the pricing only. With reimbursement contracts the client assumes the risk for the quantity and pricing. The payment arrangement, therefore, directly motivates the contractors efforts to carry out the work in an efficient and economic manner. This in turn has a major impact on the final price paid by the client.
Speedy completion is often required on commercial developments. The pressure to achieve early completion intensifies when financing and interest costs associated with acquiring the site begin to mount. Clients will seek the early appointment of a contractor in these situations to enable a fast start up on site and will favour fast track design approaches where the design is developed in parallel with site construction operations. Such approaches risk allowing insufficient time to identify or consider beneficial design options, and may, on occasion, lead to abortive working and losing time. Speedy construction on site often requires accelerated working and shift or overtime payments, more intense management presence, and the use of dependable subcontractors and suppliers, all of which add to the cost of the project. Fast track approaches rule out cost certainty and the client will become aware of the eventual cost only at an advanced stage of the project.
Once a decision to build has been reached the client will be anxious to have the building completed as quickly as possible. For many clients early completion may be the overriding priority, for example where staging a major sporting event is scheduled, or where a client is attempting to establish a market presence ahead of competitors, or to avail of tax incentives. Time is also of the essence in emergency situations such as fire or flood damage or where stabilisation works are required to dangerous structures.