ᐅ The Same Old Problem – Turnkey Contracting vs. Individual Contracts

Created on: 6 Nov 2014 09:52
N
Neubau82
Good morning, dear new building community!
I am facing the classic decision... whether to go for a turnkey build or to contract everything separately...

First, here are my key data:
Plot size – 805 m2 (8,663 sq ft) available
Living area – 160 m2 (1,722 sq ft)
Roof – gable roof 22°
Floors – 2 full floors
Basement – fully cellar
Heating system – air heat exchanger
Heating – underfloor heating on ground and upper floors
Windows – plastic frames, triple-glazed
Bathroom – shower/bath/2 washbasins on upper floor
Toilet – WC/shower on ground floor, prepared connections in basement
Garage – double garage 9 x 5 m (30 x 16 ft)
Floor plan – simple, rectangular without slopes or offsets, symmetrical
Dormers – none

For the above building project, we have received a turnkey offer of €345,000.
I am now very uncertain whether I can actually save anything by contracting the entire build separately... I also know that the construction industry can be quite hectic, and one often a) waits ages for quotes, and b) has trouble finding anyone with availability.

I am skilled in crafts myself (trained carpenter) and also have many acquaintances in the construction industry (bricklayers, carpenters, electricians, etc.). Unfortunately, you still have to present figures to the bank... which in turn require reliable data... leaving aside the mental strain...

After extensive research and discussion, I have gathered many opinions and perspectives. The following comments from my friends and acquaintances have been on my mind day and night:

- Don’t contract the trades separately, you won’t save anything; in fact, it might even be more expensive. General contractors negotiate completely different prices than you can (structural engineer)
- Based on experience, contracting separately at this scale leads to additional costs of about €100,000. General contractors negotiate very different prices than you can (architect)

Since these statements come from very experienced people, I think there must be some truth to them...
What is your opinion?
Be brave and contract separately?

I just want to sleep well again... well, I guess I can forget about that for at least a year anyway.

Thanks for your advice!
B
Bauexperte
10 Nov 2014 18:37
Good evening,

I think some fundamental issues are being confused here.
  • An architect is usually the best choice when the client wants to be very involved in the process (see arguments from klblb or also nordanney’s better half). Building a house with an architect also allows for changes in the contract award later in the process, more so than in a traditional general contractor / main contractor (GC) approach.
  • With the classic GC/main contractor model, every client needs to learn to distinguish between low-cost providers and reputable ones; this usually becomes clear after a maximum of two meetings and browsing well-known forums. The low-cost provider will always end up charging more for additions like an extra socket than the reputable provider. It is also usually easier with reputable providers— with the contractor’s approval— to expand individual contracts directly with the tradespeople.
  • The fittings and fixtures shouldn’t be the main concern. These can be addressed early on, and desired changes can be implemented, naturally at extra or reduced cost. It is also always possible, for example, to exclude trades such as tiling (which is often a key issue) or sanitary fittings completely from the contract and then look for “own” tradespeople independently.

In summary, I hardly know any construction project where building with an architect turned out to be cheaper. Even when contracting individual trades, discipline is required; otherwise, it quickly becomes a bottomless pit. And for anyone who thinks an architect doesn’t also hold their subcontractors accountable, they might as well believe in Santa Claus.

Regards,
Bauexperte
K
klblb
10 Nov 2014 18:49
Bauexperte schrieb:
And before anyone believes that an architect doesn’t also put their contractors under pressure, they might as well believe in Santa Claus

I am involved in the contract negotiations with the individual trades and can confirm that these are not friendly get-togethers.
D
DerBjoern
10 Nov 2014 19:34
I definitely do not want to dispute that working directly with an architect in individual contracting keeps you "closer to the process"! However, this is only an advantage if you are able and willing to do so. But precisely those who choose turnkey construction usually do not want that.
Y
ypg
10 Nov 2014 19:53
klblb schrieb:
@ypg
You don’t have to believe me, it’s just the way it is. I don’t want to convince anyone here, nor do I want you to tell me how you think an architect builds.
It’s simply the nature of things that when working with an architect on individual contracts, you have much more influence than with any other approach (general contractor / design-build contractor / developer, etc.)

I’m not here to tell anyone how an architect works – but honestly, a good architect who is well established also has methods to either get competitive offers or to persuade the client to hire a particular craftsman. After all, just like a general contractor, they need reliable tradespeople whose work they are familiar with whenever possible.
klblb schrieb:

Your statement

shows that you have little understanding of an architect’s work.
An architect is definitely responsible, for example, to ensure that thermal bridges do not occur. Only they have the overall perspective that the individual trades cannot have. They define how elements like rafters, insulation, windows, various construction membranes, vapor barriers, and roof waterproofing are installed at critical points. They specify what the trades must carry out and in which order.


I never claimed to fully understand an architect’s work. I don’t have to.
In fact, I have said the opposite: there can be no equal-level discussion between a professional and a layperson. If you are a professional yourself, just say so...
klblb schrieb:
[USER=12491]And if you think that tradespeople build according to the current state of the art, you are very, very naive. There may be exceptions, but regarding continuing education and knowledge of new technical standards, norms, and guidelines, tradespeople generally are not role models. However, they are often very good at convincing you that they know what they’re doing.


... “we all hope so” was my comment on the “current state of technology” topic.

I agree with everyone who says a lot can still be done during construction when you have an architect.
If you have a good general contractor with a good architect, there are few differences. Of course, there are differences in responsibility and decision-making.

But it doesn’t really matter who contracts the tradesperson. Usually, it’s the employee who receives a monthly wage for their work. Our tradespeople often didn’t even know they were working for a general contractor — I, as the client, was on site and if they called me with a question, I was there quickly. That’s what I mean: it depends on each individual.

Honestly, I wouldn’t have joined this discussion if I hadn’t read your post #13. It’s full of prejudices, so a little clarification about a (good) general contractor can’t hurt you. But apparently, you don’t want to read, instead you generalize and downgrade architects. You don’t even want to accept that a general contractor is equally valuable, just different…

Best regards, Yvonne[/User]
K
klblb
10 Nov 2014 20:32
ypg schrieb:
But you don’t actually want to read; instead, you dismiss or devalue the architect outright. You refuse to accept that a general contractor (GC) is equivalent, just different.....

Please refrain from making such unfounded claims or accusations. Thank you.
D
DNL
10 Nov 2014 20:49
What does a construction engineer or site manager, who oversees the building project, typically cost? Is this comparable to what an architect would receive according to the HOAI fee structure for the construction phases?