Most construction companies, project managers and contractors will deal with preliminaries in their construction contracts. These preliminaries, also called preliminaries, cover the costs of an entire construction project – not specific sections or activities of work.
We will define preliminaries in construction, discuss what preliminaries are, and understand what preliminary costs are included in a construction contract.
What do preliminaries mean in construction?
Preliminary construction costs affect your entire project, and you'll find that they cover a wide range of equipment, labor, and materials. Preliminaries can be one-time costs or ongoing costs that begin at the beginning of the project and continue until the end.
The easiest way to define preliminaries in construction is as a group of items needed by a construction company or contractor to complete a project but that will not be part of the finished work – site overhead, scaffolding, site power, etc.
Construction companies, contractors and owners account for preliminaries in their construction contracts because they often make up a significant percentage of the project and it can be difficult to allocate them among the various activities of a project.
Even though the owner can state which items qualify as preliminary, it is the contractor's responsibility to claim the values for each of these items – they are in the best position to estimate preliminary costs.
What is foreplay?
We can divide a typical preliminary pricing document into three sections:
- The costs involved in establishing the site, including access permits, land occupation, on-site accommodation such as welfare facilities, etc.
- Operating costs, including heating, lighting, energy, etc.
- Costs required to deliver or terminate the contract, including demobilization of local offices, health and safety files, etc.
There are also preliminary costs that you cannot easily assign to a section of work that you can normally still include in preliminaries. For example:
- Provisional sums
- A general tolerance for risk
- Site security
- The costs of design work
- Utility Supplies
What are the preliminary percentages in construction?
Preliminary costs can be applied to any project of any size. In some cases, especially for relatively small jobs, it is generally acceptable to include preliminaries as a percentage of the overall project cost, rather than pricing each item separately. These percentages vary drastically based on location, project scope, etc., starting at around 5% to over 15%.
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What do preliminaries include in construction?
The list of construction preliminaries is extensive and can include costs related to all aspects of your project. There are, however, many common items you might find in the preliminary section of any construction contract.
Planning and design costs
Every construction project requires planning the work and creating and maintaining schedules, and it is not possible to attribute all of these preliminary costs to just one project. You must also consider additional costs for reporting on schedule progress as required by the owner.
With more contracts becoming collaborative, contractors are taking on more and more design work to put their expertise in materials and methods into practice. All of this design work can span multiple sections of work when determining preliminary costs.
Mockup, testing and sampling costs
Construction companies and homeowners often need multiple contractors to provide mockups to see what parts of a project will look like once it's completed. The costs of these models, whether physical or virtual, can be included as preliminary.
You can also include other processes, such as slump testing and moisture sampling, as preliminaries, as you need to test many materials to ensure they are suitable for use in your project.
Website-based services
Each construction project has elements to improve site efficiency, such as creating access roads and controlling erosion. These projects also have environmental responsibilities to comply with relevant regulations.
Additionally, your construction project may impact adjacent structures and your neighbors, which means contractors need to account for costs that mitigate damage and disruption. Preliminaries in construction cover all of these site-based costs.
Management and administrative costs
These preliminary costs include paying people who work on behalf of the entire project and not just specific parts, such as project managers and stakeholders.
You should include these costs as preliminaries in your construction contract for two reasons: It provides transparency to the owner and allows contractors to accurately account for management and administrative costs.
Follow your foreplay with Compraço
Preliminaries in construction contracts are necessary to deliver a finished project and maintain your optimal profit margin. Construction companies, contractors and project managers must account for all preliminaries in their contracts – ignoring these costs can lead to disputes in the future and exceed your contingencies.
