As sub-contractor order books fill up, supply chains are becoming more assertive, both in terms of the contractual terms they will accept and the tender prices they offer. An added complication is the frequent time pressure on the developer to complete construction and take advantage of consistently upwards moving rents or sale prices. All of these competing tendencies pose a challenge to participants seeking to balance the requirements of their respective briefs, budgets and programmes with securing necessary contractual protections. Many sub-contractors wish to price accurately for the packages up for tender, leading to a tendency in the sector towards the use of pre-construction service periods, which contractors insist upon (and developers accept). These allow the contractor to check the developer’s design more thoroughly and, consequently, secure as competitive a price as possible. This more forensic approach to the package tender price should (theoretically) work to ensure that adherence to the developer’s budget is easier to achieve, through transparency in formulating the contract price, with the result that all parties benefit from
The rush to build: the challenges from chasing opportunities in the development sector Developers and contractors face a range of complicating factors when progressing projects. An improving market has resulted in longer lead-in times on key machinery, plant and specialist materials leading to the use of deposits and advance payments on projects.
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