Total

This is the total of the Hours, Materials and Overheads and Profit columns.

Contracting

Tradesmen and small contractors can act as main contractors (working for a client direct) or as a subcontractor working for another contractor. Although a contract exists between a subcontractor and a main contractor, there is no contractual link between a subcontractor and an Employer.

In general terms this means that the subcontractor cannot make any claims against the Employer direct and vice-versa. It also means that the subcontractor should not accept any instructions from the Employer or his representative because this could be taken as establishing a privity of contract between the two parties,

A subcontractor must be aware of his role in the programme because if he causes a contractor to overrun the completion date for the main contract he may become liable for the full amount of liquidated damages on the main contract plus the cost of damages that the contractor and other subcontractors may have suffered.

A well-organised subcontractor will keep a full set of daily site records, staffing levels, plant on site, weather charts and such like. It also cannot be over emphasised that any verbal instructions that the subcontractor receives, should be confirmed immediately to the contractor in writing with the name of the person who issued them.

This procedure is extremely important because it may eventually save the subcontractor considerable expense if someone tries to lay the blame for delays to the contract at his door. It is also important that instructions should only be taken from the contractor and he should be informed if another party attempts to do so.

Contractor's discount

Most sub-contracts allow for a discount to the contractor of 2/ % from the subcontractor's account. This means that the subcontractor must add this discount to his prices by adding 1/39th to his net rates.

Payment and retention

Payment is normally made on a monthly basis. The subcontractor should submit his account to the contractor who then incorporates it into his own payment application and passes it on to the Architect or Employer's representative for certification of payment. When the subcontractor receives his payment it will be reduced by 5% retention.

This money is held by the Employer and will be released in two parts. The first part, or moiety, is paid at the completion of work and, in the subcontractor's case, this may be either when he has finished his work or when the contractor has completed the contract as a whole (known as practical completion) depending upon the contract conditions. The second part is released at the end of the defects liability period.

This money is held by the Employer and will be released in two parts. The first part, or moiety, is paid at the completion of work and, in the subcontractor's case, this may be either when he has finished his work or when the contractor has completed the contract as a whole (known as practical completion) depending upon the contract conditions. The second part is released at the end of the defects liability period.

Defects liability period

This is the period of time (normally 12 months) during which the sub-contractor is contractually bound to return to the job to rectify any mistakes or bad pieces of workmanship. This could either be twelve months from when he completes his work or twelve months from when the main contract is completed depending upon the wording of the sub contract.

Period for completion

Usually, a sub-contractor will be given a period of time in which he must complete the work and he must ensure that he has the capability to do the work within that period. Failure to meet the agreed completion date could have serious consequences.

Under certain circumstances, however, particularly with nominated sub-contracts, the sub-contractor may be requested to state the period of time he requires to do the work. If this is the case, then careful thought must be given to the time inserted. Too short a time may put him at financial risk but too long a time may prejudice the opportunity of winning the contract.

Damages for non-completion

A clause is usually inserted within each sub-contract stating that the sub-contractor is liable for the financial losses that contractor suffers due to the sub-contractor's non-completion of work on time. This will include the amount of liquidated and ascertained damages contained within the main contract, together with the contractor's own direct losses and the direct losses of his other sub-contractors. As can be seen, the potential cost to the sub-contractor can be large so he must take care to expedite the work with due diligence to avoid incurring these costs.

Variations

All sub-contracts contain a clause allowing the sub-contract work to be varied without invalidating it. The sub-contractor will normally be paid any additional cost he incurs in carrying out variations.

Insurances

The subcontractor is responsible for insuring against injury to persons or property and against loss of plant and materials. These insurances could be taken out for each individual job, although it is more common to take out blanket policies based on the turnover the firm has achieved in the previous year.

Extensions of time

The subcontractor will normally be entitled to a longer period of time to complete the work if he is delayed or interrupted by reasons beyond his control (known as an extension of time). Most sub-contracts list the reasons and in some cases the sub-contractor may also be entitled to additional monies as well as an extension of time.

Domestic sub-contracts

In domestic sub-contracts the contractor would obtain competitive quotations from various subcontractors of his own choice and these may be based on a bill of quantities, specification and drawings, or schedules of work. Accompanying the enquiry should also be a form of sub-contract that the subcontractor will be required to complete.

There are several points that may affect costs and which the subcontractor should bear in mind. These are

  1. Whether the rates and prices are to include for any contractor's discount (normally expressed as plus 1/39th to allow 21/2%).
  2. Whether the contractor is to supply any labour or plant to assist the subcontractor in either carrying out any of the work or in off-loading materials.
  3. What facilities (if any) the contractor will provide for the subcontractor such as mess rooms, welfare facilities, office accommodation and storage facilities.
  4. Whether the contractor is to dispose of the subcontractor's rubbish.

Contracting

Often a subcontractor will find himself working under a private contract, written or implied. This usually takes the form of working for a domestic householder or a small factory owner and the following procedures usually apply in this type of work.

Estimate

The initial approach would usually come from a purchaser, e.g. 'How much will it cost to have my garden landscaped?' At this stage, he may only want an approximate cost in order to see if he can afford to have the work carried out as opposed to a quotation which is a firm offer to do the work. Therefore, a brief description of the work to be carried out together with an approximate price will suffice.

However, it should be made clear that the price is an estimate and does not constitute an offer that may be accepted by the purchaser. The estimate may be based on a telephone conversation only, e.g. 'It will cost about £4,000 to £ 5,000 to landscape your garden', or it could be based on a brief visit to the house. In either case, little time should be spent on an estimate and it is generally wise to express it as a price range.

Quotation

A quotation is generally seen as an offer to do the work for the price quoted, and could constitute a simple contract if accepted. It follows that some time and effort should be spent in compiling a quotation to save arguments at a later stage. One should always remember that the contractor is the expert and must use his expertise in order to guide the purchaser and should discuss the work with him in full. He should tell the purchaser exactly what he is getting for the price and also what he is not.

This may mean going in to some detail such as what will happen to the surplus excavated materials, how access will be gained, how long the job will take and similar items.

The contractor should also find out from the purchaser exactly what restrictions (if any) will be placed upon him. For instance, will the purchaser keep the drive clear of cars to allow a skip to be used and will the contractor only be allowed entry to the premises on certain days and/or at certain times? These factors, should be ascertained in advance, and the costs of complying with them should be made known to the purchaser who may decide to take steps to change the restrictions.

Once the contractor has considered all the relevant factors then the formal written quotation can be produced. It should state precisely what the purchaser is getting for his money, including when and how long the job will take and contain all the salient points of discussions that have taken place.

After a quotation has been submitted then all that needs to be done is for the purchaser to accept it. Although a verbal acceptance would constitute a binding agreement, it is always more satisfactory if the acceptance is made in writing.

Payments

There is much debate on how and when payments should be made in domestic situations. Ideally from a contractor's point of view to be paid in advance would be the most advantageous, but the chances of the purchaser wishing to do this are remote.

On the other hand, it may cause undue financial hardship to a recently self-employed contractor to have to buy all the materials himself and not get paid until all the work is completed. Whatever payment policy is adopted it must be agreed with the purchaser in advance and form part of the written quotation.

Possible alternatives are

  1. Being paid when the work is complete. This is probably the best method from a public relations aspect and contractors who can complete a job in a few days should have no difficulty in adopting this policy.
  2. Being paid before the work is done. This is only really feasible where the contractor concerned is of unquestionable reputation or is well known to the purchaser.
  3. Being paid for materials as they are bought and delivered with the balance paid when the work is complete. This could be a practical solution for smaller contractors, but the purchaser will probably want proof of the material costs, so careful handling of invoices is necessary.
  4. Some form of stage payments that usually take the form of agreed percentages of the quotation price or agreed parts of the quotation price paid after stages of the work have been carried out.

Pricing and variations

It is important that some method of recording, pricing and being paid for variations is agreed at the outset and this is particularly relevant when dealing with private clients. Unforeseen additions, more than any other item, are the main cause of disputes and are often avoidable.

The risk of this type of dispute can be reduced by ensuring that the original quotation is as detailed as possible. The detailed specification of the materials could be contained within the descriptions or done separately. A quotation broken down in this way is detailed enough to enable the purchaser to ascertain that he is not being overcharged for any variations that may occur and yet is not so detailed that the purchaser is going to question the price of every detail.

Also, if the purchaser should wish to change anything himself then there are no arguments on what was included in the original quotation. If variations occur, it must be established who should pay for them. There are three main types of variations.

1. Those instructed by the purchaser.

2 . Those that should have been included in the original quotation.

3 . Those that are necessary due to events that could not have been foreseen.

The liabilities for 1 and 2 are relatively straightforward. If the purchaser says he wants a different paving flag to his original choice, then he must bear the additional cost. Conversely, if the contractor forgot to include the cost of the sub-base in his quotation then it is only fair that he bears the cost.

Item 3 is more difficult. If it is the purchaser who is receiving the benefit of the variations and if they were not foreseeable, then it would be logical to assume that it is the purchaser who should bear the cost. An example would be where the excavation to a patio revealed old foundations underneath, the contractor would expect to be paid the extra cost for removing them.

Other instances may not be as clear cut as this example and it may become necessary to arrive at a cost-sharing arrangement if genuine doubt exists. Variations should preferably be agreed in advance before the work is carried out. They should be recorded and signed by both parties and, wherever possible, priced in detail and agreed.

Homeowners Guide To Landscaping

Homeowners Guide To Landscaping

How would you like to save a ton of money and increase the value of your home by as much as thirty percent! If your homes landscape is designed properly it will be a source of enjoyment for your entire family, it will enhance your community and add to the resale value of your property. Landscape design involves much more than placing trees, shrubs and other plants on the property. It is an art which deals with conscious arrangement or organization of outdoor space for human satisfaction and enjoyment.

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