5 Signs that your tender price is NOT a fixed price!

Whether you are building for the first time or for the fifth time, obtaining a fixed price tender to understand what’s included and what is not included is never easy.

In this blog, I will discuss 5 signs showing that you are tender price is not actually a fixed price.

If you are building with the same builder for the fifth time, hopefully you have formed a deep trusting relationship that works.

Even that could be a little risky if your contact at that builder leaves half way through your project(s).

Having said that, it’s important to understand what you are getting and look for signs that could potentially cost you tens if not hundreds of thousands of dollars.

Signs

Sign 1:  Earthworks

“Provide Eathworks excavation up to 1m fall”:  Basically this is saying that your earthworks is fixed, BUT only up to 1m fall.  What happens if it’s more than that?

A classic response when you ask the builder:  “well it should not be, we obtained your contour surveys and did our inspections and this is all you will need.”

My question then is:  “if you did your due diligence Mr Builder, why on earth are you specifying up to 1m?”

The reason is simple:  they are covering themselves in case they didn’t investigate properly or they made a mistake.

In which case, they have a window to charge you more later.

A fixed price is just that.  It is not ambiguous.

It is not clever in it’s framing or wording.

There should be no mention of 1m or 1.5m etc…

Sign 2:  Piering  

“Provide 80 lineal meters of piering.  Fixed Price.”:   this is one of my favorite examples where one builder is using this language to assure their clients that they included piering at a fixed price.

While they may be right, because they are not going to charge you anymore for the 80 lineal meters of piering that they included; BUT… What if you need more piering?

Your builder can either fix their piering price or they can’t.

The only exception for not fixing your piers is when your soil test comes back with inconclusive results from the engineers.

Other from that, there is no universe that exists where the builder should not be able to fix their piering.

Remember, having a number and saying “Fixed” does NOT mean anything.

Sign 3:  Temporary Fencing

“Provide Temporary Fencing up to 30mm.  Fixed Price.  No more to pay.”

Me:  Ok so have you done your due diligence on my site?

Builder:  yes of course.

Me:  and you have determined that I only need 30m of temporary fencing during the build?

Builder:  correct

Me:  excellent, so if this is all I need; why are you putting in 30m?  Should it not just simply say “FIXED”?

Builder:  yes but we want you to know how many meters of fencing.

Me:  I don’t care really.  I just want it to say “fixed temporary fencing”.

Builder:  it’s policy that we include this in our tenders.  We want to be transparent and clear upfront with our inclusions & exclusions… Unlike other builders that don’t mention anything.

Me:  who is not being transparent here?  So you are including at a finite number which means you are not fixing it.  If you are fixing the price, then you don’t need to specify the number of meters.  Otherwise what happens if you need 40m of temporary fence???

Sign 4:  Risky Reviews Pattern

People will generally look at builder’s reviews and as long as it’s above 4 stars on productreview.com.au or google reviews, it means that they are ok.

While there is an element of truth to that, it might pay off to check their 1 star reviews to make sure that there is no pattern on their behavior.

I know for a fact that there is a builder in Sydney that actually gets their suppliers & trades to put up positive reviews about them.  Another builder pays their clients to write 5* reviews on them.

Unfortunately, this happens some times in our industry.

So it would be very useful to dig a little deeper into their negative reviews to determine if there is a pattern or some commonality.

Investigate it further to make sure that when they say they provide a fixed price, it’s actually true.

Sign 5:  Spoil Removal

This is another common problem that happens all the time.

If you specifically ask the builder not to remove the spoil, then that’s fair.

But if you don’t and you are asking for a fixed price, not including spoil removal EQUALS not fixed price.

Some of the common responses I hear from builders that do this:

1. We want to be honest and transparent with you.  We are not sure how much soil will come out as a result of your earthworks.  So we would rather show you exactly once all done so you are paying for exactly what you need.
2. We want to save you money and be honest with you.  You will even pay direct to the trades who are removing your spoil.  You will know how many trucks are leaving and you will know exactly what you are paying for.  Our price is fixed and we want to be transparent with what you will be paying when we are on site.

You get the idea…

Finally

And the list goes on and on.  When you are comparing your pricing and builders, it’s no easy task to compare apple to apple.

However a way to eliminate the builders you should not be dealing with is how they deal with their pricing process.

The last thing you want to do is obtain a fantastic price from a builder and you end up paying tens if not hundreds of thousands of dollars.

If you want to read more about this topic, visit my blog on Terms & Conditions Traps.