Hi

Can any one advise how much I should be paying someone to project manage and build a project estimated to cost approx £260,000. I have been quoted 30% on labour plus 16% on materials plus 10% on subcontracted work plus an hourly labour rate of £18/hour to completely manage and build the project. I really just want to know if these are reasonable rates for a job in central Scotland in the current economic climate. The project manager/builder was also the architect for the design stage. I haven't put the build out to tender.

Thanks

Who estimated the project cost?

Without some idea of what you're building, and to what standard, it's hard to judge whether you're getting a good deal or not.

The labour rate seems reasonable by itself - but as we chose to project manage our build ourselves, I couldn't comment on the additional costs. Our 'labourers' helped us get a better discount from our local builders merchant - we get roughly the same discount as a small developer, despite being clueless self-builders. I'm not clear on why you should be paying a premium to your builder for materials?

Makes me feel queasy knowing that your builder, architect and Proj Manager are all the same person. I've always found that at least having a different architect and builder is a Good Thing. More eyes to spot inconsistencies for a start.
Sounds pricey to me too, but I wouldn't know what the going rates are. That's just based on the general cost of builders and architects in Edinburgh and a feeling that if those jobs are all the same guy then it's money for old rope for them.

This insistence on a daily rate tells me that your architect is unsure about how long the build will take so he is leaving that option open. What he is actually offering to do is to act as the main contractor and therefore you should be negotiating a fixed cost to build which would include his profit margin. If you accept that a 25% margin is fair that would give him 65,000 quid for a job that should finish within 6 months. That leaves just under 200 grand and you would be building overall at a 1.3K per m2 which is very generous I would imagine in Scotland but that depends on the quality of your finishes. To be frank it sounds expensive and you need to be getting a lot more quotes. Builders are bleeding so you should be able to get very keen prices.

He has now offered to do just the project management bit and put the building work out to tender. He is still asking £24k. For this he is offering "tendering, appointing and supervising subcontracts; design development and preparation of drawings; researching into alternative technologies and assisting in making grant applications"

This represents approximately 9.2% of the build estimate. I read somewhere that an architect or Quantity surveyor might charge anywhere between 8% and 12%. 5% sounds much more reasonable at £13,000. I'd love to do the management myself but I don't have the time to spare right now so I'll need to pay someone else to take the headaches.

To me the job seems quite complicated due to our requirement for FSC certified wood warmcell or equivalent insulation and larch cladding not to mention the PV, bomass boiler, etc. I'd be terrified to unleash a bog standard builder onto this job unsupervised as I know from previous experience they'll just put in what they can get cheapest!!

Am I being naive?

I think it unlikely that he will drop his fee by half but I suppose I can just keep pushing until he gets to the point of walking away. :-)

Posted By: betterroofI definitely think a project manager is essential if you want to achieve high targets in terms of build quality/insulation etc.

Maybe our experience is atypical, but our general builders have proven to be very conscientious and more than capable of doing excellent work, even when faced with techniques they've not used before. If Lexy is getting an oak frame from one of the usual manufacturers, the process of completing it is not so specialist that a decent builder cannot do it.

If you already know you want FSC certified wood warmcell insulation, and an oak frame, what exactly is your project manager researching? Ask the suppliers and they can surely tell you your options and offer installation advice.

I think in general you need to get to at least one of the homebuilding shows and talk to people. Whilst building well is a challenge, it's not rocket science, and there are plenty of people out there doing it. 24K is a full time salary for one skilled person for six months. Are your requirements so unusual that you need a skilled person working full time on project management for the duration of the build? Talk to some of the oak frame suppliers and see if they have had any projects in your area, and if they recommend any local builders.

You've said that you don't have time to manage the, but you need to make time to put everything in place. A couple of day's research and phoning around now could save you thousands of pounds, even tens of thousands of pounds. You're putting a lot of faith in your only option now, and don't seem to have even followed up his previous jobs - so you've no idea if he has delivered the sort of project you're asking him to supervise.

We can offer endless advice here, but there's really no substitute for you checking out your alternatives, talking to suppliers, other local projects and just meeting people face to face.