Direct to Contractor

Again, assuming that you already have your plans prepared and you've found a good and reputable contractor, we will proceed on the next construction set-up which is Direct to Contractor. Here are some notable advantages and disadvantages of this set-up.

ADVANTAGES:

1. You can better plan your expenses because you already have a target cost for the construction works unlike in the previous setup, where in you continue to spend money until the project is finished. You will only know the cost of the project after it is completed. You only pay for the monthly accomplishment of the contractor meaning you only pay for the items that have been finished within the billing period

2. You don't need to engage yourself in the construction site since everything will be taken care by your contractor.

3. You will not be liable of any accident that might happen during the construction period

4. You will not have any problem regarding labor issues or workers' demands. You don't have to go look for workers by yourself since your contractor will be the one to manage all labor works and all issues related to manpower management.

5. You don't need to invest for construction equipment, power tools, and form works. A construction firm usually has these.

6. You wouldn't need to worry on the leg works for the legal documents regarding the project. Processing of permits and other documents are commonly part of the contract including all coordination works needed until the project is finished.

7. You don't have to worry on sourcing and buying of materials. Also, you will not worry of wastage, pilferage and warehousing since these are all part of the contractor's responsibilities.

8. You have a fixed schedule. If you agreed to finish the project in 6 months, the contractor should deliver the project to you in 6 months unless there are acceptable delays as stipulated in your contract. Otherwise, you can impose penalty charges on the delay of turnover.

9. If you have questions, expect that you can have professional answers and advises since most qualified contractors are professionals.

10. Warranty. All the works done by the contractor has 6 months to a year warranty. They will repair it with no extra cost from you.

11. You can request for as-built plans and other construction documentation that you can use as reference in future repairs, renovation or troubleshooting.

12. Contractors normally deploy at least 1 full time construction supervisor so that the project can be monitored and built accordingly.

DISADVANTAGES:

1. Higher cost. Because of mark-up and overhead charges, the net contract cost is surprisingly high if you will compare on direct cost estimates by informal contractors.

2. Any changes or additional works you want to impose during construction will be charged separately. These are called Change Orders or Extra Work Orders. Including item of works that you forgot to include in the scope of works. Although, most contractors are willing to charge no extra cost if the item you are requesting are just too minimal compared to the total contract cost. I actually don't fully consider this as a disadvantage because for me, it is just fair to charge for any additional works done which are not included in the signed agreement.

3. Unless you hired a Construction Manager or Inspector, it will be hard to check if the contractor is faithful in doing his construction works. It will be hard to monitor and check if all the materials the contractor is using are according to the prepared specifications and in acceptable quality standards.

4. If not monitored properly, contractors tend to speedup the construction but sacrifices the quality of workmanship.

5. Unless you hired a Construction Manager, it would be hard for you to evaluate the contractor's monthly accomplishment. unless, you know construction also. But again, you can ask questions if you have doubts or you can't understand the billing.