Architecture / June 5, 2018 / .
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.
Buildings affect everyone and can intrude on the freedom, privacy or rights of individuals. Statutory legislation regulates many activities of those who wish to build. Planning legislation controls the appearance and intensity of planning of buildings and may limit the extent of development on particular sites. Building control legislation establishes minimum standards and requires that buildings are safe and efficient to use. Safety legislation sets out to eliminate accidents to persons in the course of constructing the building. Environmental legislation protects society and wider environment from potential negative effects of the development process.
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.
The factors influencing this decision include: Is the more expensive option a worthwhile investment? If it can be demonstrated that savings will arise as a consequence of incorporating the more expensive alternative, then the client is well advised to choose this option. The quicker the payback period, the more likely it is that the more expensive option will be chosen. How flexible is the client‟s budget to finance more robust, better quality or more economic structures or systems? Regardless of whether the client wants the more expensive alternative he or she may not be able to afford it. Retrofitting, however, is inconvenient, disruptive and much more expensive subsequently. Will the client occupy the building? Clients who develop to sell or lease may be less concerned with the operating and maintenance costs of the facility which will be passed onto the eventual purchaser or user of the facility. Clients who spend more initially will seek to recover their investment through higher rents or sales price. This approach may be adopted by future oriented private sector clients concerned with sustainability and green building issues. What is the life-span of the building? The shorter the planned life span of the building the less appropriate it is to incorporate robust and durable materials and systems.