Simple Works Contract

twistedstairway
September 7, 2016
Have an architect designed home in Melbourne that's been to tender and I've picked a builder. Been presented with the standard 69 page Simple Works Contract created by the AIA and Master Builders Australia.

What has been your experience using this contract? Especially interested to hear of any issues had with the contract or with the build and how it was resolved with the contract.

Comments (15)

  • LesleyH
    Make sure the prime cost items are realistic such as allowances for tiles, kitchen, floor coverings, light fittings, sufficient power points, external taps, etc. This is where blow outs occur.
  • bigreader
    I'd contact AIA and MBA and ask what is their dispute resolution process is when a complaint is made against a member resulting from this contract.

    I think the standard contract is a great idea. The important thing is that you understand all of it. And as pointed out are very specific with your inclusions and specifications.

    PS make sure the builder is actually a member and not just using the contract.
  • bigreader
    Also the home one forum may have more specific replies for you.
  • PRO
    VR Builders
    As a builder I would steer clear of the simple works contact, too much power to the architects, wanting retentions, in charge of approving payments, generally slowing cash flow for the builder and then having long defects periods.
  • PRO
    Cathi Colla Architects

    The Simple Works Contract is written in collaboration with the Master Builders Australia and the Australian Institute of Architects. The purpose of the contract is so that the risk (cost of work and timing) is equally shared between the builder and the client (owner). The contract is administered by an architect to ensure that each party is equally protected.

    The contract is good because the client will know up front the cost of the works and timing of the works. If there is a need to vary time and cost then the builder has the right to claim additional time and cost. The contract clearly sets out the process of variations to the project.

    An example would be if during the course of the renovation there are termites found in the floor structure the builder can make a claim for additional time and cost. Another example would be if a client (owner) wants to make a change to the kitchen joinery such a change would impact the time and cost, again the builder has a right to claim for additional work and time.

    Another good reason to use this contract, from a clients point of view, is if the project runs over time there is a part of the contract which requires the builder to pay the client/owner penalties to cover additional costs due to the delay (such as rent when the client can't move back into their home).

    There are other contracts that can be beneficial for different reasons. Just make sure you are protected during your project.

    Hope this helps! Good luck for you project!

  • twistedstairway
    Thanks lesleyhawkins. No provisional sums.

    Only PC items are wall tiles, floor tiles, timber deck & soffit lining.

    Allowances seem generous at 60/m2, 90/m2, 120/m2, and 60/m2 respectively.
  • twistedstairway
    Thanks bigreader, sensible advice.
  • twistedstairway
    Good to hear your perspective VR Builders. There are many stories of builders going bust and we don't want that to happen to us. The builder and architect have worked together on numerous projects going back a decade and apparently have used this contract a few times, so fingers crossed for us too.
  • twistedstairway
    Great feedback Cathi Colla Architects. Primary concern for me is that we the clients are well protected under this contract - which appears to be the case. Will go study it in detail as a cure for my insomnia.
  • LesleyH
    I think the timber deck is underpriced. Why is this not fully costed or is this just the cost of the decking boards? What allowance for kitchen and lighting?
  • PRO
    alsoCAN Architects

    In extension to Cathi's point - the main reason why the Simple Work Contract works is that some builders like to have a mediator during the building process. In this contract the architect is the mediator.

    Architects don't always work with retention, but the whole point of having retention is a buffer to cover costs, like if the builder cannot finish the job and you need to find another builder. It covers some of the costs to work with another builder.

    The 3 main contracts out there are:

    • Master Builders Association contract - this is between the client and builder
    • Housing Industry Association contract - similar the the MBA contract this is also between the client and builder)
    • Master Builders Association, in collaboration with Australian Institute of Architects contract - this one is between client and builder, with architect as mediator

    Hope this helps!

  • twistedstairway
    Hi lesleyhawkins, I think we're going off topic but keen to glean any pearls of wisdom on budget control. Decking is prime cost item, so the figure is for cost of materials, not install (which has been accounted for).

    Not sure what you mean by kitchen and lighting. I am purchasing light fittings, the builder has to wire the house accordingly - I have a ceiling plan done for this, and will be reusing my existing light fittings. The kitchen plans have been fully drawn up and costed. The only uncertainty is around the cost of tiles which is the prime cost item. Let me know if I'm missing something.
  • twistedstairway
    Thanks alsoCAN. Good information and it does help!

    Going through this process so far has taught me that good architects are worth their weight in gold. I would not be willing to spend my next 5+ years of savings on a house without seeing one.
  • LesleyH
    All good twistedstairway.