Direct labour vs fixed price option

mapera

Hi there,
I know this has been discussed before, but I wanted to ask opinion on a compromise option that we are thinking of.

We are in the process of planning a comprehensive refurb and 2storey extension of our old semi-d in Dublin. Its a complete job with a number of rsj required, concrete floors with underfloor heating, etc...We are concerned with the cost and material quality of going with the fixed price builder, while the risk,delays and stress of direct labour scares the bejaysus out of us. I'm an engineer, but not the right kind (electronic) for this kind of project

So I'm thinking:
1. I'll buy all materials
2. I will get a fixed price from a builder for the shell, I.e. foundations, block work, windows & external doors, roof.
3. I will use direct labour after that for all subsequent tasks.

Any thoughts on this? ... Will there be a significant saving you think, or what would be the most appropriate work to have in the fixed price deal you think? E.g perhaps all plumbing and underfloor heating?

Any advice would be great!
Thx
Al

DOCARCH

mapera wrote: »

Any thoughts on this? ... Will there be a significant saving you think, or what would be the most appropriate work to have in the fixed price deal you think?

The problem with dircet labour is that in reality you may only know if you saved money, after the job is done!

I did one refurb and house extension in Dublin where the client went direct labour thinking they were going to save money. At the end of the job, when all the costs were added up, I know that they could have done the job maybe 10 to 15% cheaper if they had gone down the main contractor route.

In my experience, I would not advise anyone to go down the direct labour route especially for a house refurb and extension...messy in my opinion.

Also, as you allude to, you are going to have to factor in the cost of a project manager or factor in your (considerable) time into the equation.

Markcheese

Do you have much building / project management experience ? Do you have time to be onsite a lot , and doing or organising for small jobs to be done at the right time... Especially in a refurb things get moved around the site a lot usually hand work.... Insurance ???
Get several quotes and decide from there...

mapera

Thanks guys, I appreciate it may be messier, obviously if price wasnt a factor it'd be a fixed price job all the way, so Im trying to shave off where I can. Given my lack of experience here, seems i may be shaving in completely the wrong place!

Is thre anything to be said for at least just separating 1 and 2 (i.e. I get all the materials)... I know i'll be prepared to spend a lot more time shopping round than a busy builder?

DOCARCH

mapera wrote: »

Is thre anything to be said for at least just separating 1 and 2 (i.e. I get all the materials)... I know i'll be prepared to spend a lot more time shopping round than a busy builder?

I'd be pretty sure even the busy builder will have cost of materials 'shaved' to the minimum with suppliers.

Not trying to be negative about your approach but if you are in full time employment you really could be creating an awful lot of work for yourself.

Aside from buying the materials, you will also need to schedule deliveries, make sure materials arrive at the right time, etc., etc...and then ensure the right materials are actually delievered. Have seen many times on site materials being returned...builder orders A, but B arrives on site!

Headache!!!

mapera

yeah... i see what you're saying... guess it's best to just let them do their job ... have to shave something else!..the cat maybe!

heavydawson

mapera wrote: »

yeah... i see what you're saying... guess it's best to just let them do their job ... have to shave something else!..the cat maybe!

Well mapera, doing a direct labour build at the moment, and while it does allow you to pick the best of each trade, I can tell you it is stressful. I certainly wouldn't let money be the deciding factor. At this stage (blockwork finished), I'm spending roughly 2 hours a day, and every weekend since October on it.

The main pro for us was that we got to choose the different trades, and I was able to do things like increase the insulation spec during the build if I saw fit.
If you go with a builder, be sure that they have a good reputation, and each of the sub-trades used are up to scratch.

FWIW, I'm an electronic engineer myself. If you do go direct labour, you'll certainly end knowing a lot more about your house than you ever thought possible, and I have to say that I get a lot of satisfaction out of that.

kkelliher

mapera wrote: »

1. I'll buy all materials
2. I will get a fixed price from a builder for the shell, I.e. foundations, block work, windows & external doors, roof.
3. I will use direct labour after that for all subsequent tasks.

On the material remember if you buy it you will generally pay 23% VAT on the materials. If you allow your builder to buy it you will pay 13.5% VAT on the materials.

Generally if you specify the products you want in your tender you should not have an issue with regard to the materials. In most cases the available materials that you will purchase will in most cases be the same as a builder will choose. This may differ in terms of plumbing, sanitary ware etc but this is where a detailed specification on items would assist.

DOCARCH

kkelliher wrote: »

On the material remember if you buy it you will generally pay 23% VAT on the materials. If you allow your builder to buy it you will pay 13.5% VAT on the materials.

Very good point.

mapera

Wow, that's potantially a big saving... so really I should be getting a trusted builder to do everything here, is what im hearing overall