Caring for your supply chain
The last few months have been a great time for the sector - most housebuilders have reported significant growth…
Published 31 October 2014
You will have seen how many schemes have become increasingly challenging for housebuilders to design and construct using the traditional Do-it-Yourself method. Building a high rise tower block (with commercial and/or retail elements) on a logistically tight site in London is a far cry away from building a couple of dozen standard house-type semis in the suburbs.
Against this background, it is not surprising that there is a growing trend for housebuilders to leave it to the experts to build and, in doing so, allocate risk to those well placed to manage it in order better to preserve your profit margin in the long run. For some developments, it makes sense to engage a D&B contractor as a "one stop shop" to take on responsibility for delivering them. Here are just some of the reasons why:
Effective management and control over the budget through the use of a single point of responsibility for all the design and construction of the project – short term perceived additional cost is outweighed by being able better to manage risk over the life of the project.
Defects claims are on the up. When adopting the DIY construction method, there is a risk of getting caught in the middle of a squabble amongst your supply chain over who is at fault (not so when engaging a D&B contractor).
D&B contractors can assist with buildability issues at design stage. With fixed start and completion dates, it is also easier to set delay damages rates and recover financial losses in the event completion is delayed.
D&B contractors are more au fait with delivering complicated mixed use schemes involving multiple works packages and logistical challenges (although teams in-house are catching up).
Alleviates strains on in-house capability to manage and co-ordinate increasingly high value, complicated packages.
More streamlined procurement method, dealing with only one contractor and therefore one contract. Reduces paperwork, management and administrative time spent and, at the same time, increases the chances of the necessary contractual paperwork being put in place putting you in a better position in the event of a dispute.