Procurement
& Construction

Design is complete before the builder is appointed. Multiple builders price the same fully-documented package. Competitive tension drives price down. Owner has maximum control over design. Most appropriate for projects where design quality is paramount. Requires complete documentation before market — any incomplete information is priced as risk by tenderers.

Builder takes responsibility for both design development and construction. Faster to market — builder can start site while design is still being resolved. Lower owner control over design outcome. Risk of value-engineering at the expense of quality. Better suited to commercial and industrial projects where programme is the priority.

A single builder is selected and a price is negotiated without open competition. Common for repeat clients, specialist work, or where a builder's specific expertise is required. Requires strong cost intelligence to validate the negotiated price — engage a QS. Heritage and complex conservation projects often suit negotiated procurement.

Has the builder completed comparable projects — similar type, scale, and complexity? Request references from recent clients and inspections of completed work.

Who are their regular trades? A builder's quality is largely determined by the quality of their subcontractor network. Established, consistent relationships are a positive indicator.

Is the programme they've submitted realistic? An overly compressed programme is often a sign of optimism bias or a failure to fully read the documents.

Is the builder adequately capitalised? A builder who runs out of funds mid-project is the worst outcome. ASIC searches, financial references, and trade credit references are all reasonable due diligence.

Is the builder willing to execute a standard form contract (ABIC, HIA, MBA)? Resistance to standard contracts or excessive special conditions is a warning sign.

Evaluate against the pre-tender estimate and other tenders. Outliers — unusually low or high — should be investigated. A low price can reflect errors, omissions, or an intent to recover through variations.

Australian Building Industry Contract — Simple Works. The standard form for architect-administered residential and small commercial projects. Balanced between owner and builder. Defines roles of superintendent (typically the architect), variations process, extensions of time, and dispute resolution.

Construction contracts are paid progressively — typically monthly or by stage. Payment claims are assessed by the superintendent against work completed. Retention (typically 5–10%) is withheld until practical completion and the end of the defects liability period.

Any change to the contracted scope is a variation and must be priced and approved before the work is done. Verbal instructions are not a basis for a variation claim. Architect's Instructions (AIs) are the formal mechanism for directing changes.

Builder must hold Contract Works insurance (covering the works under construction), Public Liability, and Workers Compensation. Owner should hold Owner's Risk insurance. Both policies should be confirmed in place before works commence.