Monthly Archives: September 2013

“Fixed price tenders”

Today, when I Googled “fixed price tender”, a Wisdom Homes website page about their Five Star Pledge comes up as the 6th result. It’s only preceded by pages offering definitions of the term and some forum threads all asking what it means to have a fixed price tender. If I can find a cheaper fixed price tender from another builder for a similar house, wisdom will beat it by $1000!

So I guess you could be forgiven for thinking that a fixed price tender will be, well, fixed. That you could actually compare it with another fixed price tender easily. Imagine the surprise you’ll get when your fixed price tender has words like these in it:

  • to be costed when…
  • allowance
  • by owner
  • note only
  • subject to….

All these words mean that the price at the bottom of the tender could change.

Here is where to look for those change words in your tender:

  • Piering. In our tender it actually says “Provide concrete Piering (Fixed Price) up to 1.5m deep.” The next sentence says “Should additional piering be required, any extra costs will be charged to the owner.” What this means is that the “fixed price” includes all the piers up to 1.5m deep. If any particular pier needs more than 1.5m, we’re going to be charged extra. Other builders work it as a combined allowance. For example, you might be allowed 90m worth of piering. So if all the peirs add up to be 90m you’re ok, anything over and you’re charged. In some cases, anything below 90m will be credited back to you. Our clause doesn’t say anything about crediting us back if all the piers are well under 1.5m. And then there is the trust issue: unless you’re watching them pour the concrete how will you know how much piering you actually used?
  • Service connection points. For sewer, water, stormwater, phone, NBN, electricity, gas. They will all say “within … meters of the building”. So, for example, our sewer connection is included if it is within 10m of the building and connecting to an existing junction point within the site boundary. If the sewer connection point is 11m away from our building we pay extra. If the junction point is not installed on our site boundary we pay extra. This can be an issue with big blocks, or where you need to set the house a long way back from the road (typically these connection points are installed adjacent to the street)
  • Earthworks.  Our equal cut and fill allowance is for 1m of fall over the block. If your block is really sloping and needs to be levelled out then you will be charged extra.
  • Retaining walls.  If you need a retaining wall installed to correct the slope of your block, it’s extra.
  • Tree removal.  If you’ve got trees to clear, more $$. Same goes for long grass and debris.  If someone has left their rubbish on your vacant lot it needs to be cleared before site work commences or you’ll be charged for its removal.
  • Footpaths.  If you have a council footpath along your block any damage to it could be your responsibility.
  • Subject to developer, council and statutory authority conditions of approval.  If the developer/council/anyone who needs to approve your plans asks that you change your plans for a particular reason, you’ll be charged. If there are extra fees for resubmitting your plans for approval after the changes have been made, you’ll be charged for that too.
  • Flooding.  If your land is affected by flooding you’re up for more money. This could be in the form of consultant fees, flood reports, surveys or corrective measures.
  • Building adjacent to sewer. If your house is to be built near a sewer line then a peg out fee may be charged. Then, if any changes need to be made then you’ll be charged for those too. Our house will be adjacent to a sewer and I don’t understand why they simply cannot cost these changes seeing as we know it’s there. What they have done is put in a $2000 provisional allowance to cover it. But, this means if the price of a peg out fee (currently $910), for example, changes between now and when it is finally costed we will be charged the increased price. If extra piering or other concrete is needed we will not be charged today’s price, but the price when it is actually purchased. I’m told the reason they cannot cost it right now is because the block is unregistered.
  • Stormwater Hydraulic engineers design.  If your council requires a hydraulic engineer to give their ok to your house design to make sure you’re not adversely impacting the stormwater system you’re going to be charged. I’m not sure why the builder cannot find out now if this will be required and cost it. The clause just says “note only” and there has been no allowance made for it.
  • Standard fees. Standard development application fees should be included. Any other application fees will be charged to you.
  • Council damage bonds.  Some councils require you to pay a bond (around $1000) in case you damage some of their assets (usually footpaths and kerbs). The builder will probably ask you to pay that even though you won’t be the one driving the excavator that will likely do the damage!
  • Subject to developer approval.  If your developer, like ours, wants to approve everything from your choice of brick to your external paint colours and plant choices then this clause is likely. Ours says that if modifications are required to suit the developer then we will be charged.
  • Restrictions as to User. Because the land is unregistered the Section 88B is not available. This document outlines restrictions on how the land can be used. For example, if there is an easement. If your plans have to change because of this then you’ll be charged.
  • Impact on adjacent lots. At the moment there are no other houses next to us. If there is before we lodge our plans for approval then we will need to pay for a footprint survey to confirm the setback of our house lines up with the other properties.
  • Bushfire prone areas. We have been given a provisional allowance to cover whatever is needed to make our house bushfire safe. If it costs more, we’ll be charged.
  • Changes to State Legislation.  If legislation changes and affects a part of the build then you’ll be charged.
  • Changes to taxes, charges and levies. If one of the approving authorities changes their taxes, charges, levies or pretty much anything else, you’ll be charged.

I think that’s it.

A few of these things are because the land is unregistered. The developer is stipulating the building contract must be signed before we can settle on the block. They allow 21 days between registration of the block and settlement. 21 days is not enough time for the builder to find out all the unknowns and then get the tender and plans back through estimating and drafting. So we’re stuck with it the way it is.

In my opinion, this should not be called a “fixed price tender”. I think its false advertising.

There are other builders who do offer something that looks much more like a true fixed price. Check out Anne and Alok’s blog for a good example of this. There were a few things for them that changed after the tender and the builder coughed up for it. That must have given them some peace of mind.


The cost of the offerings to the DRP Gods

On Thursday last week we received what is supposed to be our “final fixed price tender”. When we accept the tender it will form part of the contract that says exactly what will and won’t be provided. Understandably, we’ve got the fine tooth comb out. I have issues with the term “fixed price tender” because I can see a whole list of clauses that are “to be costed when…”, but that is another story.

It looks like we’ve changed admin person permanently as well, which is nice for us because we didn’t like the old one. The new one has been going above and beyond already and has even called the DRP on our behalf to discuss a few things. Let’s hope it stays that way. While we’ve got the chance we’re composing a list of questions to ask our new admin person, most of them we’ve already asked the old one but didn’t really get an answer.

This morning my fine tooth comb has focused on exactly how much the DRP has cost us. Below is a list of all the things we’ve had to do to comply with the DRP’s “guidelines”. It adds up pretty quick.

  • to meet higher than standard BASIX requirements, upgrade water tank to 6000L in lieu of standard 3000L rainwater tank, $2000
  • provide corner façade parapet including provide 1 18-06 aluminium awning window to external side elevation of home office, $6213
  • provide Moroka texture paint finish to porch brick piers and parapet in lieu of standard,  approximately $3000
  • provide classic 1 façade and stria cladding to front and rear of house, no charge
  • provide 600 mm eaves overhang to first floor in lieu of standard, $2500
  • provide 1 aluminium awning window to side elevation of powder room in lieu of standard (same size), $45
  • provide 1 aluminium awning window to side elevation of ensuite in lieu of standard (same size), $45
  • provide 1 06-18 aluminium sliding window to side elevation of home theatre, $360
  • provide 1 06-18 aluminium sliding window to side elevation of bedroom 2, $360
  • provide 1 06-12 aluminium sliding window to rear elevation of bedroom 4, $325
  • provide 1 06-12 aluminium sliding window to rear elevation of upper lounge in lieu of standard, no charge
  • provide 1 06-18 aluminium sliding window to rear elevation of bedroom 3, $360
  • provide 450 mm deep powder coated aluminium window hoods with fixed louvre blades to ground floor windows of the northern and western façade (7 windows and 1 door), $4390
  • to meet higher than standard BASIX requirements, provide $5000 allowance for 1.5 kW photovoltaic solar package, $5000

Total $24598

Generally, we feel like this about it:

but people keep telling us that ultimately it will make our house look better and be nicer to live in or easier to sell. I don’t know about all that. All I know is we haven’t got final DRP approval yet. And, we still have to cost in landscaping which also has to be approved by the DRP.

What do you mean, last Tuesday?

James called the DRP man yesterday and asked about our progress.

DRP man says “your plans were pre- approved last Tuesday”.

Sorry, what?

Our plans were pre-approved and Wisdom has told us absolutely nothing for a week.

I can read between the lines of James’ curt email to Wisdom requesting an explanation that he is peeved. And that is saying something, nothing much fazes James. Well, maybe apart from clear bathroom windows.

The explanation comes back saying that DRP had emailed the draftsman, not the admin person. This is not much of an excuse to me. I think what really happened is that our admin guy has gone on leave and no one has bothered to check on our file.

All I can say is that we’re lucky our block is not registered or we would have been up crap creek by now.

Either way, the good news shining through is that the plan has been pre-approved. Here is what the DRP had to say:

  1. The corner treatment is marginally considered satisfactory subject to the feature external shade structures that are provided on the northern windows of the leisure and kitchen windows also being provided to the northern and western home office windows. The northern home office window can alternatively have a permanent pergola structure between the feature parapet and main wall. These additional external shade structures will provide another wrapping / corner treatment element which is required.
  2. All windows facing the streets are to be clear glazed and not look like a typical bathroom, ensuite, laundry window.
  3. The northern home office, leisure and kitchen windows facing the street are to be provided with external shade structures (min. depth of 450mm), even if Low E glazing is provided to these windows.
  4. The clothesline and water tank is not to be visible from the street over the side fence return. No services are to be visible from the street.
  5. The fencing detailed on the site plan must be provided.
  6. No external services are to be located on the elevations facing the 2 streets.
  7. The driveway is to be a max. width of 4m at the property boundary and min. 1m from the side boundary. The front path is to have a maximum width of 900mm.
  8. It is recommended that the western office, theatre and bed 1 and 2 windows are provided with performance glazing.
  9. Please ensure the landscaping provided for this site contributes to the corner expression of the lot and is densely planted, including planting adjacent to the house.

Exactly 8 our of 9 of those points are useless information because we’ve already corrected these items or they were correct in the first place.

Item 1 is new. This is something that DRP have added in at the last minute. As window hoods on western walls do absolutely nothing for shading, I can only imagine they want these because they think they look good. Take note that our roof eaves on the western front are also a massive 750 mm.

Remember that when the plans were re-drawn there were some issues where Wisdom had made mistakes and the tender and the plans didn’t match up? We were told not to worry, the plans had already been sent to DRP for approval (despite us asking to see them first for quality control) and we can fix up these little issues when we get the approval back. No need to hold it all up for another week just to fix some “little mistakes”.

Well, just to be safe, we’ve reiterated the fact that Wisdom need to correct these items before we sign any kind of contract.

A different admin guy, who we like better, is following up for us while our normal one is on leave. He says they weren’t really “little mistakes” and we should never have been told that it could be fixed afterwards. He now has to call the DRP and make sure that the changes will be ok.

This is exhausting.

Here is the list of “little mistakes”.

  • Tender item 49 – the aluminium awning window for the study was included in this item in the original tender but has been dropped off in the second tender. It needs to be added back in. The original tender reads “provide 1No AAW 18-07 aluminium awning window to external side elevation of home office”. However, to match the front awning windows, it needs to be a AAW 18-06.
  • Tender item 57 – the concrete area is to be noted on the plans as a proposed item to be detailed during landscaping, but is not to be included in the tender. Will be done after handover. Please confirm with Linc whether removing this will affect Pre-Approval.
  • Tender item 58 – Obscure glazing in bathroom. Remove this item. DRP is not allowing obscure glazing.
  • Tender item 60 – this should be an AAW 1806, not an ASW 1206. This is to match front façade ground floor windows.
  • Tender item 61 – this should be an AAW 1206 not an ASW 1206
  • Tender item 66 — have been charged for two windows to be provided however there is only one on the plan. Please remove extra window from the tender.

I’ll let you know how it all goes.