Building Contractor Negitiations

Building contractor

Negotiating with Your Building Contractor

Preamble

One may argue that the best way to ensure you get the best service in your building project is to hire a good contractor and make him a good offer. While hiring a building contractor may not be so hard, the main problem is how best to handle the contract negotiation process. Here are some important tips to keep in mind.

Determine the Average Cost of Similar Building Construction Projects

Similar buildingsIt is important to know the prevailing rates and specifications of all relevant cost items for the project. Engaging the services of a quantity surveyor or cost engineer will be your best bet of getting these costs. In addition, ask friends and family about the costs of similar buildings (note that similarity must be both in size, specification and quality of workmanship). This knowledge will help you eliminate any chance of being ripped off by your building contractor. Equipped with this knowledge, you can then go ahead to invite your prequalified building contractor for negotiations.

Kindly note that most honest building contractors and building construction companies would likely take any offer slightly below or above their estimated cost of building construction. Be careful to avoid underpricing during the contract negotiation process, because it gives the impression that you neither value nor respect the building contractor’s effort and quality of service. Always keep in mind that as a result of the volume of work involved in the building construction process and the associated building construction risks, the building contractor deserves a fair remuneration for their efforts.

Prioritize Budgeting and Building Construction Contract

Building construction contractArmed with the knowledge of price estimates for similar building projects, the next thing to do is to draw up a proper budget and a legal building construction contract. The budget is a document outlining the costs of the different work items as well as their projected execution times. Simply put, it is a document that lists all the work to be done, their various costs of execution as well as the times when they should be executed. The building construction contract on the other is a document that outlines the rights and responsibilities of all the parties to a building construction contract.

The importance of working with a budget and a building construction contract in all your building construction projects cannot be over-emphasized. Besides helping you get a fair deal during the contract negotiation process; it helps to give the project perspective and direction. The contractor would know the quality of materials to use, the quality of workmanship required by the contract, and the length of time it would take to complete the project. Also, since the building construction contract will properly delineate the rights and responsibilities of the contracting parties, it will eliminate the risk of unnecessary disputes during the construction of the building project.

Anticipate Fluctuations in Average Market Price of Building Materials

Building contractor materialsThanks to the volatility of the Nigerian Naira, market prices can change any minute and that affects the project cost. It is advisable to have first hand and detailed knowledge of the prices of building materials whilst making allowances for market fluctuations. This gives you an idea of what to expect from your building contractor and helps you ascertain that you are getting proper value for your money.

Most building contractors have particular suppliers they work with and their prices informs the quote they deliver to clients. It is therefore important that you get average pricing and anticipate that your contractor’s prices may be a little higher than the market average.

Be Ready to Offer Your Building Contractor a Fair Price

 Fair pricesDuring contract negotiation, it is always advisable to ask for details from your building contractor and also to be clear on what you expect from your contractor. A proper quote (contractor’s budget/bid and the building construction contract) usually solves this problem as it contains a breakdown of the contractor’s plan and a detailed description of all cost items. As you receive the contractor’s quote and proposed contract provisions, reconcile them to your own budget and contract provisions and settle any discrepancies with the building contractor. Now you can go ahead and offer your building contractor a fair price he can never reject.

With this, there will always be an improved level of communication and project performance as a result of the clearly stated costs, timelines, project objectives, project deliverables and contractual obligations. Note that documented details of jobs – especially contract jobs – can never go out of style. While it is very professional, it also prevents the issue of misinterpretation, miscalculation or misjudgment on either side of the contract negotiation process.

Choose a Mutually Agreed Project Timeline with Your Building Contractor

Building construction agreementWhen fixing a term for the execution of your building project, be considerate in fixing a time frame that is convenient both for you and for your building contractor as this is an integral part of the contract negotiation process. If you make arrangements for your project to be executed and completed during a period where weather or other conditions are not conducive for your building contractor, you may get a heavier bill or the contractor may reject your offer.

In summary, always equip yourself with all the necessary project contract information, then ask your prequalified building contractor to furnish you with their project bid and contract conditions. While negotiating, always aim to achieve a win-win situation for yourself and your building contractor, this is the only way to achieve a truly stress free building construction experience.

Identifying your Super Hero Building Contractor

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  • Looking to work with a competent and professional building contractor who can work with your budget?
  • Looking to identify your superhero contractor, who would help you realize your dreams with minimal stress?

Your best bet is to partner with Conifer Konstruktion. You can always count on us to deliver high quality projects at the right time and price. Contact us today.

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Engr. Okoye is a registered Civil engineer with interests in Engineering, Project and construction management as well as general management. He is currently the Managing Director of Conifer Konstruktion (Nig) Ltd, a Building construction/project management company located in Awka, South Eastern Nigeria.