Today’s video is The Ultimate Construction Process Guide for Subcontractors, watch the video by clicking here or continue with this quick read.
There are 3 key phases to any construction project…
- Pre-Award
- Post-Award
- End of Defects Liability Period.
How you conduct your business in each phase will determine how much money you make and the likelihood of securing repeat work.
What is the Pre-Award Phase?
- You’re invited to tender or bid for a project or a company may approach you.
- Then you negotiate terms and conditions as well as price.
- REMEMBER… ALWAYS NEGOTIATE it makes you LOOK MORE PROFESSIONAL.
- Then, if you’re successful, they award you the contract.
Remember that 50% of the time, when they send you the contract to sign, what you’ve agreed hasn’t been properly included.
The Lesson is?
ALWAYS check the FINAL CONTRACT.
ALWAYS.
This isn’t iTunes where you can just skip it.
What is the Post-Award Phase?
- You enter the construction program phase.
- Likely, you’ll be asked to provide security (Typically 5%-10% of the project value).
- The end of the project is PRACTICAL COMPLETION (you will get one lot of security back after this).
- DIARISE and Highlight your Practical Completion Date (If you don’t hit your PC date you will get hit with Liquidated Damages).
- If you are delayed or complete extra work you need to alert the client so that the PC date can move.
- Remember that YOU NEED TO SUBMIT your PC form.
- Once you have reached Practical Completion you will get a Certificate.
DONE….?
Well Almost!
What is the Defects Liability Phase?
- Typically 12 months after Practical Completion.
- This is the period where any defects in the project need to be rectified.
- Remember to Submit for REMAINING SECURITY/RETENTION.
- The contract is completed after the Defects Liability Period (this is where you get back your second lot of security)
TOP TIPS?
- Make sure you understand your SECURITY in relation to your contract value. Ask Yourself… If your contract value increases, does your security payment?
- Make sure you understand how the DEFECTS LIABILITY period is configured. Ask yourself if you fix something during the DL period, does the contract add on another 12 months of DL?
We want you to be the MOST SUCCESSFUL you can possibly be. That’s why we put together content with tips and advice that is tried and tested.
For more contractual advice, Quantum Contract Solutions is here to guide and assist you through everything contract related. Let’s reduce risk in your contracts and save time and money, just click this link to get our FREE case study to show you how clients just like you are doing it.
