EVERY INDUSTRY has its issues and the construction game is no different. As with all issues, you simply have to know they exist, understand the various fixes and plan accordingly.
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Planning is generally the key. By thinking ahead and catering for every contingency you'll not get caught out, and may even find yourself ahead of the game.
Variations
Variations to an agreement can be some of the most frustrating areas of a contract. It's often the surprising ones that affect project budgets and can upset relationships, destroying a project's good will.
As you will appreciate, variations come in many forms and can adjust contract terms that will affect price, time or risk. They can vary, but mostly involves the following aspects.
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Time or Program Variations
A certain item or a product may be required onsite at a certain time, or before other works can take place. If that item runs late and slows down the construction program it will have a direct impact on all the other trades involved.For example:
If flooring mesh doesn't arrive on time, concrete can't be poured, plumbing has to wait, and so on down the track. Building is a very sequential process! Sometimes a builder my need to make changes from experience that impact individual builds; sometimes clients request materials with uncertain lead times causing a blow out. - Cost Variations
Plans can alter causing the the original scope of works to change. Invariably this is because the client hasn't thought through every consideration or need, or events outside the control of either party occur, or circumstances change for the client after the original contract is signed.
For example:
There is unforeseeable work that needed for a new building requiring more robust foundation work due to less stable land below; OR
The client or owner has requested additional bathroom space in the building, or reduced the number of facilities because of a new business plan.
How to Reduce Variation Costs
Variations are quite normal with a large scope of works, and the amount of time in between planning and sod-turn. However, the solutions are rather straight-forward.
- Early builder involvement: By asking for advice early on you'll get the voice of experience. A builder can point out probable areas of change.
- Budgeting for those unforeseen circumstances.
- Have a mindset of 'it will happen' and budget accordingly.
- A good technique for this is called 'front end loading' -- getting your chosen professional to identify all the unforseen risks and budget for them accordingly.
- Changing or reducing the scope to cater for the price changes: If the budget won't allow changes, make the hard decisions about what stays and what goes.
- Changing to a construction management agreement: A competent construction management professional has the experience to guide the planning, putting in realistic milestones and achievable budgets.
Bottom Line: Hopefully these few weeks apples have caught your attention, and also provided some simple solutions. Anyway, will cover several further issues in a few weeks time
