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14 December 2023

Why do Schools accept blown budgets on almost every project

Tenders, Variations, Documentation, Process, and more.

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It has been quite evident that variations on projects have become the normal and school organisations often accept blow budgets from builders.

After losing some priced based tender work to competitors, we thought it would be useful to internally track the outcome of the projects to see if tendered price and timeline was honoured along with the initial vision of the client.

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Our conclusion:

School business managers and principles often accept blown budgets from builders on almost every project due to the tender process. 

The tender process can be a lengthy and complicated one, which puts time pressures on decision makers. It may also involve multiple bidders offering different terms for their services, making it difficult for the school to make an informed decision about which builder is likely to deliver best value for money.

Additionally, many construction projects are complex in nature and difficult to accurately price even with detailed tender documents. As a result, schools may find that builders have under-quoted at tender stage only for unforeseen costs associated with the project to arise later down the line. This can lead to budget blowouts as builders look to recoup any additional costs incurred during construction through potential variations or cost-cutting exercises which often leads to the quality of work dropping or the risk of warranties needing to be used increasing.

Possible Solution:

Consideration of the modern way to approach projects through a comprehensive Design and Construct Model which allows for the Tender Process to continue to take place!

It is still possible to tender your project even when working with a design and construct company. The design and construct process can be used to simplify the process of tendering as design and construct companies will have their own design teams who are experienced in producing designs that meet specific requirements.

This allows the Design and Construct teams to actively collaborate together to ensure the Project Vision can methodically be brought to life within the client budget.

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