Signing a contract with a builder

Middleage Fanclub

Revisiting this thread with a related question. We have a line item in our contract for windows for 20k We sourced the windows and the supplier will fit these for 20k. Our QS is now telling us that 1/3 of 20k is actually builders profit so we’ve exceeded our budget by €6,500 and owe this to the builder as a variance. Is this right? It’s very hard to source hardware if there is some arbitrary ‘profit’ figure to be factored in? If I’m right and there is no profit for the builder here, then where is his profit (in the wider contract). This is a house renovation. Thanks

kevgaa

https://www.boards.ie/discussion/comment/121213487#Comment_121213487

You need to be careful with the way the bill of quantities is documented but it should be broken down something like below..

EXTERNAL DOORS AND WINDOWS

Amount for supply and installation of external doors and windows - 20,000

main contractor's profit 1,250 00

attendances 500 00

builder's work in connection 3,250

While the total cost is 25K you only have 20k to purchase the windows and doors

P.S. also check is VAT INCLUDED

DOCARCH

33.3% profit and attendance would not be normal!

5 to 10% profit and attendance would be normal.

Is it your QS, or the builders QS, telling you this?

kevgaa

Sorry, Those are just sample figures I made up for illustration purposes.

Agree 5-10% is normal.

builders work is unique to me as we are changing a few openings, doorways and replace lentils etc that is where it’s added on the bill of quantises.

DOCARCH

https://www.boards.ie/discussion/comment/121215281#Comment_121215281

Really the associated builders work should be included elsewhere (e.g. in demolitions/alterations). If there's an item/cost in for windows, that's what it should be for.

kevgaa

Thats your opinion and thanks for the info but each job and bill of quantities is unique so we will leave it at that.

As I said figures are made up for illustration purposes to answer an earlier question so don’t read too much into them.

Middleage Fanclub

So the BoQ says: Budget total 20,000 (windows 15,000 - works (cills, flashing, lintels etc) 4,000 - allowance 1,000)

Actual window cost 20,000 (we upgraded)

Now my QS is telling me that he is allocating 40% of that 20k cost for 'profit', so 8k and so we are now 8k over budget (a variance).

For me, the 'works' looks chunky but it's in the contract I signed but this 8k profit is pulled from thin air as far as I can see ??

Tefral

https://www.boards.ie/discussion/comment/121215720#Comment_121215720

What form of Contract did you sign?

Middleage Fanclub

https://www.boards.ie/discussion/comment/121215740#Comment_121215740

as in yellow or blue? not sure, can ask architect, why do you ask?

kevgaa

40% profit is gouging and I can’t believe that’s in a contract. As outlined earlier builders profit and attendance is generally 5-10%

if you follow that logic and are contracted to if you put in a 25k kitchen then you will also owe the builder 10k profit for that also.

Your QS is meant to be advising you on costs etc doesn't sound like they did much negotiating on your behalf.

Tefral

https://www.boards.ie/discussion/comment/121215859#Comment_121215859

So you signed an RIAI form? Thats good. Clause 19 is the same in both

(a)Sums or rates included in the Contract Documents and marked “Prime Cost” or “P.C.” are provisions to

meet payments by the Contractor to Nominated Sub-Contractors or Nominated Suppliers. Such payments

shall be net of any commission or trade or other discount.

(b)Payments as aforesaid shall be made only in accordance with the directions of the Architect as to the work

to be executed by the Nominated Sub-Contractors or the goods to be supplied by the Nominated Suppliers,

the firms to which the payments are to be made and the amounts to be paid. If any amount so authorised

and properly paid is more or less than the relevant Prime Cost or P.C. sum or rate included in the Contract

Documents the difference shall be added to or deducted from the Contract Sum as the case may be.

Middleage Fanclub

https://www.boards.ie/discussion/comment/121215949#Comment_121215949

The contract doesn't state 40%, this is the figure my QS is telling me is builders profit and I can assume that I now owe him this as a variance as I've 'over spent' on the windows

kevgaa

Maybe I’m reading this wrong but from what you said earlier

So the BoQ says: Budget total 20,000 (windows 15,000 - works (cills, flashing, lintels etc) 4,000 - allowance 1,000)

I would have said the allowance was the builders profit at 5% as that would be normal.

overspend I reckon you owe the builder

5k overspend

5% profit on that is €250

plus vat at 13.5%

Unless there is something in the contract specifically I reckon you owe the builder just short of 6k extra not sure where the QS is getting 8k