Self-build home: Appoint a contractor to design the home

Introduction.

Design and build projects are unusual in that they can involve either a single-stage or two-stage tender process.

Where a two-stage tender process is adopted, the contractor might be appointed in the first instance just to design the home using a pre-construction services agreement. The second stage appointment to construct the home is agreed by a process of negotiation once the design is complete. Ideally the form and terms of the second-stage contract should be agreed during the first stage, along with a basis for determining the price. If second-stage negotiations are not successful, negotiations may begin with an alternative contractor.

A single-stage tender process, where the contractor is appointed at this stage to design and construct the home, can be adopted if requirements are known in detail, or if the self builder has already prepared an initial design (or had an initial design prepared on their behalf by an architect) that the contractor then takes on and develops. In this case, the original designer may continue to work for the self builder, acting as a client representative, inspecting works on site and carrying out contract administration.

Before beginning the selection process, it is important to ensure the project brief is up to date and properly reflects requirements.

Identifying potential contractors.

Prospective contractors may be identified on the basis of:

• Recommendation.
• Research and interview.
• Competition.
• An existing relationship.

Agreeing the scope of services.

The self builder should prepare ‘employer’s requirements' describing the project and the nature of the contract. Contractor's proposals are then prepared in response to the employer's requirements. These present the contractor's suggested approach for designing and constructing the building, along with their price.

Employer's requirements might include:

• A project overview.
• The brief.
• The scope of services required.
• The form of contractor's proposals required.
• Site information, including details of any covenants or easements or other restrictions to the development of the site.
• Existing design or site drawings (if they exist).
• The proposed programme and key dates.
• The proposed form of contract and conditions that will be applied (if known).
• Allocation of risk for any unknown items, such as; unforeseen obstructions below ground, works to parts of an existing building that cannot be seen until they are exposed and so on.
• Requirements for insurance and warranties.
• Responsibility for statutory approvals (such as planning permission and building regulations approvals) and information about any existing approvals or consultations.
• Requirements for samples and items for approval.

The more detail that is provided, the less scope there will be for disputes later.

It is normal to request prices from more than one contractor. The more prescriptive the employer’s requirements can be about the format that the contractor’s proposals should follow and the way the price should be broken down, the easier it will be to directly compare the proposals received.

Contractor’s proposals might include:

• Design drawings and specifications if these have been requested.
• A programme.
• The tender price and contract sum analysis.
• Proposed payment schedule.
• Any proposed provisional sums (allowances for elements of the works that are not yet defined in enough detail for contractor to price).
• Details of insurances.
• Curriculum vitae of staff along with a summary of their relevant experience on similar projects.
• Proposed sub-contractors.

A single-stage appointment is likely to require more information from the contractor, including initial design proposals.

Making the appointment.

Once contractor's proposals have been received, there is likely to be a period of negotiation during which any inconsistencies between the contractor's proposals and the employer's requirements are discussed and either the contractor's proposals or the employer's requirements are amended to ensure agreement between them. This is an important part of the tender process as it is not always entirely clear which document prevails after the contract has been entered into.

It is important to interview the preferred contractor to establish how comfortably they will fit into the project. It is also wise to check references and to look at previously completed work to get a sense of the quality they are able to deliver.

Rather than awarding the full contract to design and build the home at this stage, the first-stage appointment for design services might be made by a separate, preliminary agreement. This might be a bespoke agreement, a consultancy agreement or a pre-construction services agreement (PCSA), sometimes called early works agreements, with an appendix setting out all tender items to be applied to the subsequent construction contract, and including a clause that makes it clear there is no obligation to proceed to construction (for example, if planning permission is not received), and that in such circumstances the pre-construction fee would be full and final settlement of the contractor's costs.

NB Self-build clients are ‘domestic clients’ for the purposes of the Construction (Design and Management) Regulations (health and safety regulations generally referred to as the 'CDM Regulations'), and so the client's duties under the regulations will generally fall to the contractor. See CDM for self-builders and domestic clients for more information.

► Next stage: Prepare a concept design.

▲ List of all stages.