Kitchen Renovations in Sydney and Blacktown: Why Fixed Price Contract is Beneficial?

Blog | March 11th, 2019

Fixed price contracts (or bids) are the most frequently used type of contract for home renovations throughout the Sydney and Blacktown areas of Australia today. When a homeowner and building contractor sign a fixed contract agreement for kitchen renovations in these areas, the builder agrees to perform the necessary renovations for a fixed cost.

It is true that with today’s rising prices for building materials and labour, many builders will include in the contract a risk premium to cover unpredictable cost increases within the construction period agreed to. Also, the majority of fixed price contracts include various provisional sums, or estimated costs, for such items as “siteworks” that cannot be fully known at the time the building contractor and homeowner sign the contract.

Reasons for Choosing a Fixed Price Home Renovations Contract Over a Time and Materials Contract

Although both fixed price and time and materials (cost plus or estimate of cost) contracts for home kitchen renovations offer advantages, selecting a fixed price contract will give you homeowner benefits such as the following:

• Scope of Work Provision. – A fixed price contract for home kitchen renovations will include a scope of work provision outlining the construction work needed to complete a top-quality job for a fixed cost. Any additional work or materials costs that arise during the course of renovations must be agreed to by both homeowner and contractor. After both parties agree to these added expenditures, a change order is issued to cover costs of the necessary materials and labour to complete these additional construction tasks. Cost plus, or time and materials, renovations contracts are agreed upon based on estimated costs of building time, labour and materials, which can vary greatly from start to finish of a kitchen makeover.

• Use of Change Orders.
– As many change orders as are needed during the construction period can be issued and implemented, as long as they are agreed to in writing by the homeowner and renovation firm’s contractor for the job. These change orders can be both time-saving and cost-effective since they can be used when the unpredicted lack or shortage of a building material, tool or equipment rental would delay further construction. Some contractors will take advantage of the allowances provision included in many cost plus (time and materials) contracts to inflate materials costs while actually using lower quality supplies to complete renovations.

• Assurance of Quality Building Materials. – With use of a fixed price contract, homeowners can be assured that the quality building materials agreed to in the contract with their building contractor will be used, rather than some inferior brand or caliber. If additional amounts of some materials are needed during renovations and the cost for these items has escalated, a change order can be agreed to and used to purchase these additional building supplies. With cost plus, or time and materials, contracts, some renovations contractors will offer low cost materials estimates to obtain a contract for a job and then inform the homeowner, after the contract is signed, that costs have suddenly risen for these items. This occurrence can lead to heavy extra expenses for homeowners during kitchen renovating projects.

When you contact the home building and renovating experts of Knebel Kitchens with head office and showroom located in Ingleburn, NSW, you will receive top quality professional advice, plans and construction services for your home kitchen renovations in the Sydney and Blacktown areas. Our highly experienced team will ensure that your kitchen makeover will completely satisfy and even surpass all your expectations for the new home kitchen that you desire.

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