20th September 2019
Black Raven Ink + Associates
Kai Lin (Director)
☎0401 270 423 ✉ BRIAarchitecture@gmail.com 219 Abbotsford St, North Melbourne VIC 3051
ABN. 3771 2882 692 Architects + Planners
RE: Tender report- House in Malvern, Victoria
Dear Mr. Peter, I am writing to provide you a report and recommendation on the tendering. This report is based on our professional analysis of the three tenders and the Pre-Tender Cost Plan received from the quantity surveyor on 19th September 2019. All three tenders submitted on time, so no one against the Australian standard code of tendering AS 4120. The table listed the final tender amount including GST and contingency and my recommendation for the tendering. More analysis and details of comparsion are below. Do not hestate to contact me if you have any questions.
Tender Analysis: Detailed comparison between tenders on Appendix 1. Tender 1: Stoned and Daughter miscalculated the cost of foundations, screw piles. So it will definetly cause the potential risks.The cost of Carpentry Lockup is relevantly higher and it is doubled the cost other competitor provided. There is no mistake on calculation. We have not worked with Stone and Daughter. We reviewed their past works, they are doing general job. Due to these potential risks, we decided not to recommend this builder. DETAILED RISK TABLE: Trades Breakdown
Cost
Potential isks
1. Foundations
65% low
Potential safety hazard if the screwpiles are not deep enough. The soil movement will cause cracking to the house.
2. Screwpiles
63% low
It works as retaining wall. Less and shallow screwpiles are unable to bear the weight of the soil. So neighbor’s house will crack if the soil incline to your property.
3. Brick Base
50% low
Not enough bricks to cover the floor or cheaper brick will be applied on. It slows the progress of construction and the outcome will not achive our expectation.
4. Carpentry Lock Up 5. Steel Structure
223.7% high 37.2% low
Wasting budget on this trade. Not necessary. Not enough material. The builder is trying to replace steel structure with timber, and that is why carpentry lock up is so expensive. so the house will have lower performativity than what we expected.
Tender 2: Peter Gorilla + Team made mistake on the Brickwork external skin. The average price of it is around $20600. I think they want to do it for $20,000. I will dialled them and negotiated the mistake. Therefore the total tender amount including GST will be $558,600. Peter Gorilla + team is a reputable construction company with abundant experience on residential houses and they deliver the finest quality comparing to other competitors. But the cost is 19.7% higher than our budget. It is extremely difficult to decrease cost to suit our budget if we do not cut our scopes. Therefore, I do not recommend them this time. Trades Breakdown Cost Potential Risks 1.Carpentry Fixing 2.Carpentry floor lay 3.Windows 4.Steel structure 5.Plaster
91.6% high 44% high 84.4% high 118.75% high 37.5% low
Much higher than the market price. Maybe the progress is slower, so they need to pay more to labors A bit higher than other competitors. Slowing the progress maybe. Much higher than the market price. Much higher than the market price and the price Qs provided. lower quality and thinner plaster board would apply. The quality of the house is lower.
Tender 3: The Never Nominated building group miscalculated the final tender amount by adding the wrong number of the Prime cost sum and provisional sums to the sub total cost, but the sub total cost is correct. The correct final tender amount including GST is about $505,609.99. We dialled them and reported the mistake on the calculation. 12.4% exceed of budget can be eliminated by further negotiation and cost saving strategies. Never Nominated building group is a median scale construction company. They only build residential houses and very experienced. By reviewing their past work and site conditions, we know they can make fine quality houses with great site management. We would like to recommend this building company. Cost saving strategies are listed below and waiting for your approval. Trades Breakdown
Cost
1.Carpentry Frame
Potential Risks 13% low
13% is acceptable.perheps they forgot to add the cost of Termite protection. Further negotiation needed.
Quantity Surveyor’s trades breakdown Vs. Market price Trades Breakdown
Cost Vs. Avgs. %
1. Carpentry Frame 2. Carpentry Lock-up 3. Plumbing Roof 4. Plumbing Drainage 5. Steel Structure 6. Painter
Qs’s cost
Lowest in tenders
Price Difference
41%
$17,200
$36,364
-$19,164
58.6%
$16,000
$19,091
-$3,091
81%
$20,600
$23,000
-$2,400
137%
$16,409
$11,000
+$5,409
57%
$16,000
$22,000
-$6,000
71.2%
$15,000
$18,182
-$3,182
TOTAL: -$30,620 incl. GST The Quantity Surveyor Cost Plan C is not 100% correct. These items listed above have no reference value and cannot be used to judge the price tenderer provided. Because they are more than 40% lower than the cost tenderer provided. Therefore, the final cost amount is $ 450,000.00 is lower than the price of the real market. The cost of the building will be approxmately $ 480,620. Therefore, the cost saving strategies are important in this case if you do not want to increase your budget. Cost Saving Strategies: The cost amount Never Nominated builder provided is $505,610. We need to save $55,610 (10.9%) to achieve our budget. If the budget increases, we do not need to touch these items. We will dicuss with Never Nominated Builder if we have any change to the trades breakdowns. These savings of strategies are estimated by our architects. Detailed figures of saving will be provided by the builder.
Priority Options
Trades Breakdown
Changes
Sacrifices
Saving
1. Plumbing Roof
Change flat roof with box gutter to pitch roof with normal Quad gutter.
The building height changes and it is not very stylish.
$15,182
2. Brick Internal
Replace with plaster board and brick look wallpaper.
Lose the texture but remain the visual appearance.
$16,000
3. Windows + Glazed doors
Smaller glass panels instead of a big one.
Lose unimpeded view and more window frames.
$20997
4. Brick External & Render
Render will cover the brick appearance, so change external brick to Fibre Cement Cladding is workable.
Decrease the passive design performance.
$15,000
5. Screwpiles
Move building away from the boundary. So no screwpiles needed to protect neighbor’s house.
Lose a bit garden area, approxmately 8m2.
$6.364
6. Brick Base
Replace brick base to timber floor.
lose the characteristic.
$10,000
Secondary options: Changing specifications can barely save 5% and significantly decrease the quality of the house. -Cheaper Electricians -Cheaper pipes for plumbing -Cheaper vinyl floor -Cheaper render and painter -Cheaper windows -Cheaper plaster We recommend the best way forward is to proceed the tender with Never Nominated builder into the next phase, post-tender negotiation. However, there are some other options but I do not recommend: 1. Re-call of tender: Original tenders will be advised of re-calling. And then we redocument the documentations. Tenders make modification and send back the new cost plan. 2. Re-tender: Modify the scope of works and produce new documentation will be undertaken. Re-tender is highly not recommended due to expected of 3 months and the subsequent risks of further price increases by tenders and the increase of average market prices. Moving Forward: If you agree with our recommendation to enter post-tender negotiations with Never Nominated builder, the next step involves disclosing in writing to notice all other tenders of this decision. Futher negotiation is needed to cap the total cost to our budget $450,000. Please sign the sheet if you agree with this tender letter. We must respond to the tenders within 3 months (27th December 2019). Please contact me if you have made your decision. Or organize a meeting with me for more information. Sincerely,
kai Lin
Signature by client:
The most correct number comparing pre-tender and tenders. By comparing the tenders cost plans, I found the Pre-tender cost plan is not 100% correct, the market is changing and the price of each trade is different in different period. So some of the costs cannot be compared with the cost Qs provided. Hence, comparing with other competitors is more effective and reflect the market. Red dots means the estimated price of trades in the market. Therefore I would like to recommend the Never Nominated builder for this project. Their tender are relevantly reasonable, although they made mistake on the calculation. Further negotiation is needed for the cost saving strategies. $505,610 is 12.4% higher than the budget of $450,000. But I found there are many items can be changed in order to save money. The cost saving calculation is in Appendix 2.
FORENSIC DESIGN 1. Foundation with screwpiles
Total Floor area:
-Poor soil condition
2500 per m2 Medium quality finish.
2. Screwpiles outside the home foundation, there are three possibilities:
450000/2500= 180m2
- Carport - Wall on boundary to protect neighbor’s building as
Timber floor: Market price $80 per m2.
retaining wall - Decking in the backyard.
$5727.27/80= 71.5m2
3. Floor layer:
Two bedrooms plus two walk in closet.
living room and Kitchen : Brick base Bathroom: Vinyl floor and shower base
Tile supply: $2727.27
Bedrooms: T+G timber rfloor Driveway is covered by thick concrete
Vinyl floor + shower base: $12,000
4. Walls
Two bathrooms at leaset.
External wall: Brick covered by render
$50 per m2 , 2727/50=54.5m2 for two.
Internal wall: Brick and plaster Bathroom: Tiles 5. Carpentry: Carpentry frame, lock up and fixing According to the cost on carpentry, we know the building uses a lot timber board. so there must have two walk in closet. 6. Steel structure and prime cost of windows and doors. It tells me the house has large openings and some openings with the shape timber cannot easily make. So it needs steel frame to support those large pieces of glass panels. Or the building’s wall on boundary, people need to use prefabricated steel frame to quick install it.
M 14
Special design for windows. 7. Electrician: $13,000. some down lights with at least two fancy light. One in living room and one in the kitchen. 8. Painter : $ 15,000 The client want to paint all the plaster boards to other special color they like,
0M
2
otherwise, it would not cost $15,000. 9.Concrete External: Driveway and the base of the fence.
18
Concrete testing fee means builder is going to cast concrete in situ. It can be walls, driveway and fences. 10. Plumbing roof: $23,000
86M
12.
It must be flat roof with colorbond roof sheets and a few box gutters. I guess the roof looks like the shape I draw.
COST SAVING 1. Plumbing roof Traditional pitched rood with Quad gutter. It saves steel structure and cost on colorbond roof sheets. $28,182 drop to est. $13,000 Saving: $28,182-$13,000= $15,182
2. Brick Internal: Replace with the plaster boardsand brick look wallpaper. $20,000 drop to $ 4,000 saving: $20,000-$4,000= $16,000
3. Window + Glazed doors: Smaller glass panels and less special designs on windows. $40997 drop to $20,000 Saving: $40997.05-$20,000= $20997.05
4.Brick External $20,000 and render $20,000: Render will cover up the brick, so we use fibre cement cladding board to replace bricks. Approx. 138m2 brick wall, $3.6 m2 cement board is $48. 138 x 48 = $3679 +labors= est.$5000. Saving: $20,000-$5,000=$15,000
5. screwpiles: move building away from the boundary or delete the timber decking. saving: $6,364
6. Brick Base: Replace brick base to timber floors. 180m2-70m2-20m2=90m2 Timber floor: $80 m2 90 x 80 = $7,200 + labor =$ 10,000 saving: $20,000-$10,000=$10,000