The Subcontractors Blueprint

In episode 27 of The Subcontractors Blueprint podcast, Jacob Austin educates us on Provisional Sums. He clarifies ways in which undesigned works are included in a subcontract such as Prime Cost Sums, Provisional Quantities and Provisional Sums. He stresses the importance of the difference between Defined and Undefined Provisional Sums, and the implications this has on your programme and price. He discusses strategies for pricing Provisional Sums as well as how they should be implemented during the course of a project. The episode is a resourceful guide for subcontractors seeking to navigate the complexities of Provisional Sums effectively.

KEY TAKEAWAYS:

Provisional sums are means of including undesigned or undecided scope of works in a project, giving the client or contractor some certainty that there is some budget for it.

Prime Cost Sums, Provisional Quantities, Defined and Undefined Provisional Sums are all means of including incomplete design in a subcontract, and each is treated differently.

Prime Cost Sums specify a ‘budget’ amount to be included in a rate to buy an unspecified material. The rest of the work described in the rate should be priced properly, allowing the ‘budget’ to be omitted and the real cost added back to make a complete rate.

Defined Provisional Sums require the subcontractor to make allowance in their programme, period and preliminaries for the management and completion of the provisional works. Whereas, Undefined Provisional Sums should be excluded from the programme and preliminaries and the likes.

Subcontractors should challenge the validity of Defined Provisional Sums if they do not contain sufficient information to properly describe or allow that work to be priced.

BEST MOMENTS:

"The whole idea behind provisional sums is that it's a means of including a kind of a budget for some unknown bits of work and getting that into the contract to give the client a bit of cost certainty."

“That's opened your eyes to some of the tricks and stunts that you might see around Provisional Sums and what you can do to protect yourself from them.”

“that won't stop some unscrupulous contractor out there from telling you it's a defined Provisional Sum and refusing to give you an extension of time for it.”

“These are the kind of fine margins that can win or lose you a project.”

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/ 

Instagram - www.instagram.com/qs.zone/ 

www.qs.zone/all-links 

In episode 26 of The Subcontractors Blueprint podcast, Jacob Austin is talking Unquantifiable Risks - a baffling practice within the construction industry practiced by clients and contractors alike, where they seek to avoid carrying any risks whatsoever, often at the detriment of achieving a competitive price. Whilst these risks are passed down the supply chain to those often least equipped to deal with them - the subcontractors! Jacob highlights several examples of the kind of risks which cause these problems, and identifies ways that subcontractors can identify where these are being asked of them in their tenders. He wraps up the episode by giving his advice on how subcontractors can deal with those risks within their tender submissions.

KEY TAKEAWAYS:

Passing a risk on does not get rid of it. It may pass on to the contractor, or the subcontractor, but it is still there. And it may still come back to hurt the client if it proves too costly to handle.

Risks are passed on through omitting key contract mechanisms for time and cost extensions, and through ill-thought-out scope inclusions.

Some of these risks may go on for periods of months. So it is vital that you identify and deal with them.

Examples of unquantifiable risks such as ground risks, statutory services, and antiquities as well as other works items which can’t be measured.

Actionable recommendations for subcontractors to protect themselves against unquantifiable risks, including analysing subcontract amendments and clauses related to compensation events.

BEST MOMENTS:

"Clients are expecting the contractor to be able to price and include for things that are just unfathomable."

"You're either going to see silly prices back from the marketplace, or you're buying a project with a hole in it."

"Making a different party responsible for something that can't be quantified doesn't make the risk go away.”

“And it's not until 20 years later and it's long forgotten that some unwitting builder has their ground worker on a lump sum contract, and they're digging it (asbestos) up by the bucketload. But oh no, Mr. Subcontractor, you took the risk on the ground."

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/ 

Instagram - www.instagram.com/qs.zone/ 

www.qs.zone/all-links 

In episode 25 of The Subcontractors Blueprint podcast, Jacob Austin explores construction defects and their effects on subcontractors. He clarifies the difference between patent defects, which are obvious and detectable, and latent defects, which are concealed and may emerge long after completion. Jacob advises on the importance of using quality materials, skilled labor, and taking immediate action to fix defects to prevent further complications or safety issues. He also discusses the consequences of not adhering to construction standards and the role of the clerk of works in defect detection. The episode wraps up with a discussion on the liability of subcontractors for damages caused by defects.

KEY TAKEAWAYS

There is no firm definition of what a ‘defect’ is in construction contracts.

The importance of being proactive in identifying and rectifying issues during the defects liability period is highlighted, along with the role of attention in ensuring work completion.

The difference between latent and patent defects using a crack on a wall as an example and the implications of each type.

Common causes of latent defects, are design and manufacturing faults, and cutting corners whilst undertaking the work

The possibility of liability for damages resulting from defects and the considerations related to corrective actions and improved specifications.

BEST MOMENTS:

"We had the client's clerk of works coming around, taking great delight in telling us that we've got a problem. Oh no, the building is going to fall down!"

"Now that happened while we were on site. You could say that we were actually lucky that we were still there."

"There are some factors that can contribute: you've got poor workmanship, either by using poorly qualified staff or staff that are on too keen a price, so they're cutting corners and leaving things not properly finished."

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/ 

Instagram - www.instagram.com/qs.zone/ 

www.qs.zone/all-links 

In episode 24 of The Subcontractors Blueprint podcast, Jacob Austin is discussing Design Liabilities and Design & Build Subcontracts. Jacob starts by discussing the issue with Fitness for Purpose criteria within the design and build requirements and why you should avoid these at all costs. He then delves into some of the pertinent clauses, outlining requirements, compliance with directions and where CDM obligations are introduced. He then explains the process of submitting the designs, the various statuses of the design review process and the ability for the approver’s comments to be challenged in a timely fashion. Jacob recalls his experience of an Employer abusing the design submission procedure, and how this could have been avoided with hindsight. He then covers the liability statement which assumes that the subcontractor will have as much skill as an qualified architect in designing their particular piece of the contract design.

KEY TAKEAWAYS:

Fitness for purpose clauses should be avoided at all costs.

The process for design submission is straight forward, and there are rights for the sub-contractor to challenge the contractor’s approval of designs to seek instruction or re-state the contract requirements.

Employers do misuse the design review and approval process, and this abuse can be lessened with proper application of the design submission procedure.

The submission and approval of design does not remove obligations to achieve the requirements of the subcontract if the design is later found to be lacking.

BEST MOMENTS:

“Sometimes the employer will use the building for a particular purpose, but within his requirements, he will state, 'I want a floor that can do X.' You design to those criteria, but then the fitness for purpose element may take it above and beyond that.”

“If you find fitness for purpose statements within your subcontract inquiries and within your subcontracts themselves, challenge them and don't be afraid to walk away from the work if you can't negotiate those statements out."

"You are liable for all of that: moving the tenant out, moving them into temporary accommodation, maybe setting them straight for loss of income that they have incurred whilst they have not been able to use the building."

“They can still come back at a later time when they can’t get their five metre tall piece of plant through the door and say, hold up, Mr. Contractor, you f*d this one up!”

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/ 

Instagram - www.instagram.com/qs.zone/ 

www.qs.zone/all-links 

In episode 23 of The Subcontractors Blueprint podcast, Jacob Austin is discussing target cost and cost plus contracting. He criticises cost plus contracts, citing lack of incentives for contractors to save money, leading to cost overruns in projects like major roadworks and HS2. He suggests competitive tendering to encourage cost-effectiveness. Jacob also discusses the administrative burdens of these contracts and the financial consequences of inaccurate tender prices in target cost contracts. He advises contractors to consider risks, make clear exclusions, and include budgets for risks they are asked to hold.

KEY TAKEAWAYS:

BEST MOMENTS:

“These kind of arrangements have become commonplace in a lot of government procurement and what you're seeing is a lot of framework projects and a lot of large scale say civil engineering projects are falling under these kind of contract arrangements. I personally think these contracts are sh*t!”

“They're (cost plus contracts) lacking in any target. There's no incentive for the contractor to perform….The job takes as long as it takes, the costs are whatever they are, the fee gets added to it, and the contractor wins."

"having done a few of these target cost contracts in my lifetime i actually think these are the worst of all worlds"

"how you treat these risk sums when you're pricing the job and when you're pricing the compensation events is really key to maintaining a good target price and maintaining your ability to get a healthy margin out of the job"

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO:

Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/ 

Instagram - www.instagram.com/qs.zone/ 

www.qs.zone/all-links 

In episode 22 of The Subcontractors Blueprint podcast, Jacob Austin discusses how JCT subcontracts in the construction industry are formed. He emphasises the importance of understanding the terms and conditions of these contracts, including the rights and obligations of all parties involved. Jacob also explains the various elements of a subcontract, such as recitals, articles of agreement, and subcontract particulars. He provides detailed insight into the other items which are introduced by the sub-contract particulars such as attendances provided by the main contractor, retentions, and insurance requirements. He concludes by stressing the need for subcontractors to familiarise themselves with their contracts to avoid potential issues and disputes.

KEY TAKEAWAYS:

BEST MOMENTS:

“It is vital that you understand and know what those conditions are that you're signing up to because you've got to operate the subcontract, you've got to know where to issue a notice if you have to issue one, and you've got to understand what the change procedure is."

"These are the documents that are telling you what you're doing, so they need to be right."

"Sometimes it's not always straightforward and in spite of what some people might tell you, it's not that the contractor is trying to hide the conditions from you. It is just common custom and practice."

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

www.qs.zone/all-links 

In episode 21 of The Subcontractors Blueprint podcast, Jacob Austin is talking to you all about Risk and Risk Management. This is a topic in Construction that is not talked about enough, and for Subcontractors is a must to thrive in a difficult industry.

Jacob starts by defining risk and defining risk management. He then explains that risks are an inherent part of running any business and that a level of risk must be present for us to operate in business. Jacob explains that there are several different ways that risks are introduced into the sub-contract. He then explains some simple techniques for managing risks, and how these can play out as a sub-contractor.

KEY TAKEAWAYS:

Risk management is vital to success as a Subcontractor in the Construction Industry.

Risks can be Controlled, Accepted, Reduced or Avoided but should not be ignored.

Both Opportunities and Risks should be monitored and managed.

The key to mitigating the risks you encounter as a Subcontractor is to flag them up early to the Contractor and discuss them.

BEST MOMENTS:

"The best time to start managing risk is at enquiry stage. The second best time is now.”

“Talking about risk is something we don’t do enough of in the construction industry.”

“To truly expose yourself to no risk at all is to sit and do nothing.”

“These conversations aren’t always straightforward but the more you discuss the problems the greater the chance that you can get the issues resolved before it becomes a problem that bites you.”

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

www.qs.zone/all-links 

In episode 20 of The Subcontractors Blueprint podcast, Jacob Austin is talking all things Completion.

This is yet another topic which is simple on the face of it, but the construction industry has its unique way of making it difficult! Jacob explains terminology including Practical Completion, Sectional Completion, Partial Possession, Early Use and Completion, and explains what they mean to you.

Jacob explains the lack of definition of completion and offers his thoughts on why this is the case, and his solution for that problem. He explains that the sub-contract does not use all of the same terms, and talks through how to apply the completion clause of a JCT Design & Build Subcontract.

Throughout this episode Jacob imparts his industry wisdom, giving practical advice on how you can record completion, and his recommendations to protect yourself on a typical project.

KEY TAKEAWAYS:

BEST MOMENTS:

"There’s only one point in a project that you truly know where you are - before you start! At least then we can all readily agree nothing has happened!”

“If you thought you could look to an Architect for a definition, think again!”

“He must identify the reasons why you haven’t finished, of course in his opinion”

“This isn’t the contractor saying whoah I can’t release your retention on some nonsense technicality”

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

www.qs.zone/all-links 

In episode 19 of The Subcontractors Blueprint podcast, Jacob Austin discusses the topic of Value Engineering and Whole Life Costing. He starts by defining these two phrases which are widely used in the industry. He then gives some historical context to value engineering and how it has evolved into what we know today. Jacob highlights some interesting reasons behind particular materials being specified and how these may affect the implementation of value engineering. He also gives some practical advice on how to deal with value engineering requests, what to do to avoid the risks and ensure the full impact is considered prior to proceeding. Throughout the episode, Jacob imparts his industry wisdom to help subcontractors manage the value engineering process.

KEY TAKEAWAYS:

BEST MOMENTS:

"All it is is ripping out any value from a project and substituting it with cheap alternatives"

"In my experience how we implement it in construction is all to do with cost reduction"

"Sometimes the best savings can be quite radical"

"It just goes to show you never can tell what someone else is going to want and if you can, your skills are probably best employed somewhere else"

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

www.qs.zone/all-links 

In episode 18 of the Subcontractors Blueprint podcast, Jacob Austin delves into the topic of valuing change. He starts by discussing the different terminology used for changes in various contracts, highlighting the importance of using the correct terminology for each contract. Jacob then outlines some general principles for valuing changes, such as valuing work on the same basis as similar work under the contract and adjusting rates for changes in quality or conditions. He also explains how to handle situations where there is no similar work or benchmarks, and when to resort to a day works or time and cost resource-based price. Throughout the episode, Jacob provides practical advice and insights for subcontractors to ensure fair and accurate valuation of changes in their contracts.

KEY TAKEAWAYS:

Different contracts may use different terminology for changes, such as variations, changes, or compensation events. It is important to use the correct terminology specified in the contract you are working under.

When valuing changes, it is generally best to follow the same basis for valuing work as any work of the same nature under your contract. This includes using the same rates, scaffolding, attendances, and adjusting for any excluded elements.

If the work being added is not similar or identical to existing work, you should still start with the contract rates as a basis for valuing the change and then adjust those rates to suit the change. This may involve adjusting for changes in quality, conditions, or difficulty.

If there is no similar rate or one that can be adjusted, a new rate may need to be priced. This should be done in agreement with the contractor and may involve estimating from first principles, considering time, cost, materials, plant, preliminaries, overheads, and profit.

Day works or time and cost resource-based pricing is a last resort method for valuing work that cannot be properly measured. It is important to record the work accurately, including details of personnel, equipment, materials, and any site manager involvement, and to get a signed record of the day works from the site manager.

BEST MOMENTS:
"And rather bizarrely, even within the same string of contracts, the JCT manages to have two words for what a change is."

"Just a shame nobody told the rest of the contract." 

"Charging for prelims as part of a change is different and potentially preferable to a loss and expense situation." 

"If you're asked to complete works on a day works basis, you will need to get a signed record."

"It's also worth thinking about if you're pricing a lump sum package, have you given enough rates when you're putting your price together to give an accurate way of valuing any changes?" 

HOST BIO
Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/ 
Instagram - www.instagram.com/qs.zone/ 
www.linktr.ee/qs.zone 

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