As an estimator and a cost planner I’m not a big fan of including price options or alternatives in tenders … But I know they can be handy on occasion, and that some clients and Architects like them and, I concede, they are going to happen – So here are some thoughts that may help.
Minor (i.e. low value) optional items (both savings and extras) can be included in the tender documents to help with potential adjustments to the Contract Sum before the contract is signed. However, keep them brief, clear and simple.
Pre-priced variations for options, alternatives and / or potential changes or circumstances prior to, or during, construction may be included in the tender documents for the builders to price and submit. And though they are not actual variations yet, they are informing the client and the superintendent of the potential costs or savings associated with implementing a specific change or option.
The price submitted should include for all costs, documents, profit, supervision, preliminaries and overheads. Any time implications and lead-time requirements should also be considered and declared.
A time limit should be noted (by the builder) on each item so that the changes are not requested during construction after it is too late to implement them without any extra items, wasted work, costs or time being incurred.
Keep them simple
It is best to keep these items very simple. Limit the number of trades in each item to a minimum where possible (i.e. say up to 3 trades only per items – but preferably each one should involve a single trade only), as excessive complications makes them hard to cost with any accuracy or relevance or consistency between builders.
If the item proposed is too large or complex (for example, the cost saving to delete a whole room from a project) it is possible that the builder may not submit a price at all, or, if they do, it may be an arbitrary guess.
The cost and implications of any major deletions or additions – such as a room deletion or alterative roof shape – would be best discussed with the potential preferred builder.
Items you could consider as cost options may include:
- Light fitting supply alternatives or deletions,
- Sanitary fittings or whitegoods alternatives,
- Tile supply alternatives,
- Joinery deletions or additions…
Add, or deduct?
Options may also be requested either as an Additional cost to add in to the scope of works, or as a Deduction to the price to delete the item from the scope of the works…
Now, this can cause some confusion during the chaos of a tender preparation, so do make sure the Addition / Deduction option is clear and unambiguous and unlikely to be misinterpreted.