What the set-price proposal covers
Stroud uses the term set price. To understand a proposed price, read it together with the drawings, specification, inclusions, allowances and exclusions. Different contracts can handle changes differently; a marketing label does not replace the actual terms.
Ask the team to explain how requested changes, unresolved scope and circumstances covered by the contract would be handled. Have the price and timing implications of a proposed variation documented before you agree to it.
The clearer the design and site information, the clearer the pricing discussion can be. Ask which investigations and selections are still needed, and which lines can be priced now. MBIE’s guidance on building contracts is a useful companion to a review of your proposed agreement.
Make allowances and exclusions visible
An allowance identifies work or selections that are not fully priced yet. Ask what each allowance covers, what information it is based on and how it will be reconciled under the proposed terms. Check these common parts of the scope:
- Earthworks and retaining allowances on sloped sections
- Foundation allowances made before geotech exists
- PC sums for kitchens, bathrooms and appliances
- Driveway, landscaping and service connections listed as excluded
Questions to ask about the written scope
Take each quote and ask which items are allowances, which are priced from an agreed scope and which are excluded. Record what remains to be resolved and who will obtain the information. Ask the same questions of every proposal.
Compare the completed outcome as well as the totals. If one proposal includes a finished driveway and another excludes it, get that difference priced before deciding which offers better value for your brief.
Trace one requested change through the proposal
Use an example such as changing the kitchen layout after selections are agreed. Ask when it would be priced, how it would be approved and whether it could affect timing. This makes the variation process easier to understand before you need it.
- What is the agreed baseline specification?
- How is a requested variation documented?
- When are the price and timing implications confirmed?
Sources and further reading
Quick answers
Can any price rise under a set-price contract?
Discuss the circumstances described in your proposed contract, including requested variations and the treatment of allowances or scope changes. Ask for the price and programme implications to be explained and documented. Review the actual terms with your adviser.
Why do some builders quote lower for the same plan?
Check whether the drawings, finishes, site work, allowances and exclusions are equivalent. If the scope is different, ask for the differences to be priced or clearly recorded before comparing the totals.