Building? Here’s how to draw up a Bill of Quantities
There is no user manual for all aspects of homeownership, from moving, to taking occupation and to maintaining and understanding common and uncommon defects. Albert van Wyk has more than 38 years’ worth of building experience and has put all he has learned into a concise, easy-to-use reference book entitled, The Proud Home Owner. He has granted HomeTimes exclusive access to republish portions of his book to help homeowners make better decisions around buying and selling, as well as maintaining their properties.
Choosing a contractor
This will be one of the most stressful and difficult decisions that you will have to make. Obtain at least three quotes from reputable builders in the area. Do not entrust this valuable asset building project to an unreliable and inexperienced contractor.
It is very important to assess the quotes carefully and ensure that everybody has quoted on the same items. If you do not have the experience and knowledge to assess and compare these quotes, employ someone to do this for you. Or have a Bill of Quantities drawn up which everybody must use to draw up their quote.
A Bill of Quantities is a document in which material costs and labour rates are itemised. A quantity surveyor will calculate the quantities from the plan and the tenderers must add their labour rates and material costs.
A classic Bill of Quantities
|No||Description||Unit||Qty||Rate (R)||Amount (R)|
|5||DPC 225 wide||Rolls||2||80||160|
|6||DPC 110 wide||Rolls||2||65||130|
|12||Walls – labour||m²||250||50||12,500|
|13||Concrete ceiling labour||m²||135||60||8,100|
|14||Columns – labour||Item||5||450||2,250|
|15||Rhinolite – labour||m²||220||55||12,100|
|The quantity surveyor will fill in unit and quantity|
|The contractor will fill in rate and amount|
Obtain names from the architect or friends who recently had building work done. Get references from clients of those tendering. You will have to take time out of your day to go and look at the previous work of the contractors tendering.
Find out how committed the contractor is with other contracts and how much daily supervision there will be on your site and, more importantly, find out how much experience the foreman has.
A reputable contractor must be registered with UIF (Unemployment Insurance Fund). He will also have his workers covered under the Workman’s Compensation Fund as insurance for injuries on duty. You should consider possible consequences for you if he is not in good standing with the abovementioned funds. The contractor must provide you with indemnity for injuries and death on your site. See clause 37.2 in the Occupational Health and Safety Act. Some banks will require proof of the above.
Get names, details, qualifications and experience of all the sub-contractors, and basically conduct an interview with each one. They will be the ones actually building your home. The main contractor will only manage and supervise the process.
#1 Lump-sum contract
The contractor undertakes to supply all materials and labour for the erection and completion of the building at a fixed price and no escalation of costs is allowed for. Any increase in the cost of material and labour will be for his account. He is not allowed to charge you extra if he has made mistakes with the calculations.
#2 Cost-plus contract
This type of contract is normally used by contractors who are not experienced in calculating the cost of material and labour and on small projects.
The contractor is reimbursed for the cost of all labour and material, provided he presents the relevant documentation. The contractor is allowed an agreed mark up on these items as well as a supervision or management fee. This type of contract demands a lot of consideration.
A total budget must be fixed to assist you with the cash flow planning. All material quantities must be calculated beforehand, and rates of sub-contractors must be fixed. For example, you must know what the maximum number of bags of cement are that will be used. A shrewd contractor could use your cement on another site.
I would not advise you to use this type of contract on a large project, because it will take up a lot of your time and keeping control over the material and labour, will be demanding and could lead to many arguments.
#3 Labour-only contract
The contractor undertakes to provide all the labour and erect and complete the building at a fixed price, using materials supplied by the owner. This will be very demanding because it is your responsibility to have the correct material on site and on time. You should agree on a completion date and a total budget amount for your cash flow. The bank must be made aware of this type of agreement because generally they are not keen on financing a project conducted in such a manner.
Questions that should be asked are: “Who will calculate the quantities of material that will be used?” and “What will happen when too much material or too many items were ordered?”
#4 Owner builder
The owner will appoint a sub-contractor for every trade, who will in most cases only provide labour. The owner must supervise and give clear instructions to every worker. The owner will supply all the materials, and it will be his responsibility to have the correct quantity available on time on the site.
The big disadvantage of doing a project this way is that the sub-contractors do not work together as a team, but as individuals. They also do not always respect the work done by other teams. The blame for faulty workmanship is always put on another team. Damage to the property as well as theft is not easy to prevent and you will never find the guilty party.
A large project will take up a lot of your time and doing it this way will not always be a cost saver.
This manner of building a new house is a high-risk method and this road has more potholes in it than the roads in South Africa! First try your hand at alterations and additions before you try building a brand new house in this manner.
Some banks will not finance such projects; however, they would give you a personal loan.
Next time: What your bank needs from you and how to pay your builder