Costing Contracts

The rising cost of fuelling up those work vehicles is costing some Building contractors serious losses.

When contractors quote a contract three months in advance of a start date for the job, it can be a very expensive exercise for them unless they have a contingency clause inserted.

And not all Project Managers / Developers will accept a contingency clause in a contract. Some insist on a firm price contract. The real tragedy in this is that some contractors are so hungry’ for the job they actually accept this condition.

It is so unfair.

As the cost of petrol has sky-rocked so high so fast this year, there is no way for some of these contractors to recoup this unexpected cost. The contractor’s who get caught in this vicious and avaricious contracting situation are often the start-up’ businesses who are least able to afford it and haven’t yet learnt some of the dirtier tricks that the odd Project Manager /Developer will insist upon.

The Contractors also try to save costs by not using a legal advisor to go over the contract before they sign it. And we all know that once that signature is on the bottom line, you are liable.

It is these start-up’ businesses who are the most vulnerable. They don’t usually have the financial backing to weather these losses, so they end up going belly-up’ before their true potential is realised. So long-term, everyone is the loser because some of these new young hopefuls have unique craftsman skills that are a natural talent.

It’s just such a shame they are not better business people. But business savvy can be learnt if given the time, place and incentive to learn.

The good thing that can come out of this horrendous situation for the contractor and the Industry as a whole, is that word spreads very quickly through an Industry and when someone has done the wrong thing by one or two businesses, word-of-mouth gets around like a bush fire and the Project Managers /Developers in question don’t last long in business. No-one will work for them.

There is another bright side to this for our communities too. Once these odd Project Managers / Developers are run out of business, we will all end up with better built buildings. Why? Because the less scrupulous contractors who realise their mistake and try to cut corners by using inferior materials or take labour short-cuts in the building, won’t be tempted. All our buildings will end up being properly constructed for years to come.

All well designed, engineered and constructed buildings are a work of modern day art and it is your right as a client to expect the best your money can buy.

Jan Smith

www.constructingprofits.com