Detailing A Quote14.07.2023
Start with the scope
For my sins, I scroll down LinkedIn, reading what has come through my feed, and now and then, there is a gem.
I read an article that relates more to signing contracts with big companies, but it made a lot of sense for the smaller businesses it was headed to.
“The scope is more important than the terms of the contract.”
So here it is with my comments.
Negotiating scope in a construction contract is a critical process that demands a strategic approach. It aims to define the project’s parameters, outlining specific work that a contractor will perform, thereby creating a roadmap for the construction process.
In simple terms, when writing a quote, get all the detail in, even if you think your client doesn’t need it. Be clear about what you are doing, materials (even to say what type of concrete etc, timing, and delays expected, and be clear enough that if there is a variation – it is a variation.
The negotiation process involves stakeholders like owners, contractors, architects, and engineers and requires open communication to align expectations. Clear, unambiguous scope definitions reduce the likelihood of disputes, cost overruns, and project delays.
Discuss the quote with the client; even if you are doing the same work for the same people, have a conversation that may include why this job is somewhat different. Your client will appreciate the new detailed quotes, and the extra time means extra care (and billing for variations).
Accurate costing is linked to the scope definition, thus making it an essential aspect of contract negotiations. All parties can reach a fair agreement regarding the scope by leveraging cost estimation tools and utilising historical data.
Being clear about what you are doing, highlighting the problematic parts, and how you will complete the work will allow you to charge what you should – in these times – receive for the job. From a mechanic quoting to repair a car to concreting a driveway, the detail, signs of professionalism, and communication will get you a better return.
Considering variables such as unforeseen site conditions and regulatory changes, a comprehensive risk analysis is crucial during negotiations. These contingencies should be addressed within the scope, and measures for risk mitigation should be established.
Check where you are to do a job. If you are digging, discuss what happens when you hit a rock or when you hit clay and understand the metaphor for your business in this.
Moreover, scope creep – the tendency for the project scope to expand beyond its original objectives – must be guarded against contract clauses.
Having everything very detailed, the “Would you mind” can be added as a variation because you can highlight the scope. And for any scope creep or variation, write another quote with precisely what you are asked to do.
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