Architecture / June 7, 2018 / .
It is clear that the purpose of a building will have a major bearing on its cost. Housing has a very different cost range to apartments and commercial development. Likewish the cost of providing public amenities such as conference centres, theatres and sports stadia cannot be directly related to the provision of public infrastructure such as hospitals or schools. The cost of each building must be related to its individual design, which may be benchmarked against similar national and international projects.
The contract documents set out what work must be done, and how, and under what conditions it is to be done. They identify the contractors obligations and liabilities and form the contractual agreement to do the work for the stated price or at the agreed rates. Many if not most financial problems in building originate in inadequate or unclear tender and contract documents, often culminating in disputes between the client and the contractor over what is included in the price for the work.
The site topography i.e. the natural site features, ground conditions and obstructions, existing and adjoining building, and underground and over-ground services all impact on how the building is designed and subsequently constructed. The nature of each site must be individually checked to establish potential problems. Greenfield developments cost less than brownfield sites which may incur significant demolition, site clearance and remediation costs. Heavily sloped sites require extensive stepping or cut and fill operations and such sites may be dangerous and adversely affect the working conditions and productivity of operatives and plant output. Sites with poor loadbearing capacity will require more expensive foundations while exposed or waterlogged sites will also reduce overall productivity. The cost of dealing with unforeseen ground conditions, archaeological finds and encountering uncharted buried services may be substantial and will be borne by either the client or contractor, depending on the form of contract employed.
The contractor is selected on the basis of competitive tendering on most building contracts. The price which the contractor quotes for the job is heavily influenced by both the amount and intensity of the competition expected. In an open tendering arrangement the level of the competition is at its most intense and contractors must submit highly competitive bids to have any chance of winning the contract. This usually secures a rock bottom price. With selective tendering a limited number of competent contractors are invited to tender for the job, this limited competition arrangement results in a keen price being obtained. In the case of a negotiated tender there is no explicit competition and the parties seek to agree a fair price for the work, implicit competition exists, however, as the employer can break off negotiations. If there is no competition the contractor can, in fact, name his price. The tendering arrangement is, therefore, one of the most cost significant decisions a client will make in the course of a building contract.