Monday, March 15, 2010

Variances should I worry - Build and Make Part 6

After a long break I am back on the series .. Take a look at previous posts of this series
Part 1
Part 2
Part 3
Part 4
Part 5

In this post let's see the options of tracking and controlling the project of building your house.
There are several things you need to track as construction is started. For anything to be tracked we need to have some baselines. So first thing is establish the baseline with your builder as well as your Architect. Am I sounding too technical here. Yes! may be, but things to do are very practical and needs basic common sense. No big deal!

Following are the areas you need to establish the baselines
  1. Time lines
  2. Cost
  3. Quality
Talk to builder and architect and come up with high level schedule. Define few stages. Like Foundation, Lintel, Roof, Flooring, Plastering, Painting, Interiors etc.. Ask them whats the best shot and worst case when these can be achieved in terms of time lines. And map it with your and your and your family's expectation. This is your schedule baseline. Most of the project dont have this. If your builder can not give this, its ok. Not mandatory, unlike cost baseline.

On cost, its a little different and more stringent. Depending on the type of contract with the builder (Discussed in Part 3 ) he should provide cost estimate per item or per square or per labour. It needs to be agreed by all the parties upfront to avoid any conflicts later. The agreed cost estimate would be the cost baseline for your tracking.

Calculating the variances:
You being the sponsor/owner of the project it your responsibility to have eagle eye on the project. You dont need to do micro management if you had given for full contract, but still it is needed that you know where it stands in terms of Time, Cost and Quality (However, it's not so easy to perform quality checks by you alone, you architect might pitch in for help).

For time, you have review your baselines where you builder had committed to finish stages in certain time. Review the same and see if he could achieve the same. If not see if there were any change in plans or he is really stuck in getting things done. You need to talk to your builder highlighting the slippage. BUT
Maintainign time lines in construction area is not as same as Software or any other area. Your builder tend to slip the timelines. If it is really ok to you, and time is not that you are looking for, DO NOT make a big mess for this. Just inform that he is slipping and get more practical date and update the baseline. Pressurising builder usually have adverse effect on your cost and quality. What you need is a good home, you can wait for a while for the same :). If work has really stopped and you observe no labourers working, you can make it a scene :)

When it comes to cost, I suggest you to be little stringent in tracking. Review the bills provided by builder/ architect yourself for any errors and correct it then and there itself. You should not wait for final settlement. Most of the times you may have to make payments in advance even before work is done. It's ok to do that. But once the next bill is raised, adjust the advance payments. DOCUMENT all the payments made and bills provide separately. It will help you to consolidate later. Also document any corrections to be made if not done immidiately.

If you are overpaid, talk to builder and explain that you have overpaid as per estimate provided by him and you can make next payment after some stage is completed. Always measure the payment with respect to work done rather than with respect to time consumed. This was you are benifited.

Bottom line:

Overshooting Cost: you are overshooting budget by 5 to 8 % its OK. Dont worry. We all overshoot :). But make sure you get what you have paid for. Anything beyond 10% is a RED flag.

Overshooting schedule: Dont not worry too much. Make sure they progress and not stuck

1 comment:

Pramod said...

abbabba! enidu? problems suri maLe. By the way do you have enthu to build another house? :)