The project specification is an important legal document that is to be read in conjunction with the drawings and building contract. Actually in many building contracts in cases where there are ambiguities between the drawings and the specification, the specification takes precedence.
The specifications gives a complete description of each part of the work, just how each part of the dwelling is to be built, with what materials, what qualities of materials are to be used, how the work is to be done, and just what is involved in the work of each trade, with a section on everything from excavation, concrete work, through plumbing, wiring and heating, to the tiling on the kitchen floor and the paint on the bathroom ceiling.
Make the specifications as complete as possible.
If you plan to write your own, it would be a good idea to refer to our sample set of well-written specifications that have been used to build other houses similar to yours and use them as a guide in writing your own.
Give the make and catalogue numbers of plumbing fixtures, electrical equipment, heating plant, windows, and any other items you have definitely selected. Sometimes it is wise to state after a definite selection, "or approved equivalent," just in case the thing you have selected is difficult to get, you and the contractor can select something else that is equivalent, but you are the one to do the final approving.
Other cases where time is of the essence or which are difficult to specify may be included in the building contract as Provisional Sum or Prime Cost Item.
What is a Provisional Sum Item?
A provisional sum item (PS) is used for work (including labour and materials) for which the builder, after making all reasonable inquiries, cannot give a definite price at the time the contract is signed. Common examples include landscaping, heating/air conditioning, tiling and concreting.
An example may include an allowance for say the heating and airconditioning. The owner may not know specifically which system to select and much will depend on the final price of construction and the variation in the cost of the different systems. It would be prudent to put in a figure that relates as close as possible to the preferred system that the owner wants, however due to the lack of an actual specific brief and/or design the builder cannot give a firm price the builder will make an allowance for the work which is included in the contract price. This allowance includes GST if the contract price includes GST. Builders will allow a percentage on top of the allowance for overhead and profit and this normal ranges from 10 to 15% but the exact amount is stated in the contract.
What is a Prime Cost Item?
Prime Cost Items (PC’s) are items that either have not been selected or whose price is not known at the time the contract is entered into, and for which the cost of supply and delivery the builder has made allowance for in the contract price. Examples include white-goods, tap-ware and light fittings.
The allowance for each PC, being the cost of the item and applicable GST, should be inserted in Schedule 2 of the contract. Your margin for a PC and the cost of delivery are included in the contract price, not in the amount allowed for in Schedule 2.
Under the contract
Other details of each PC must be set out in Schedule 2 of the contract i.e. a detailed description of each PC; a breakdown of the cost estimate for each PC; and if the builder proposes to charge any amount in excess of the actual amount of any increase to a PC, how that excess amount is to be determined.
PC’s are not treated as variations. If there is an adjustment in the calculation of a PC, whether it is an increase or decease, it should be allowed for in the next progress claim or the final claim.
The builder is required to warrant (promise) that the allowance for each PS and PC are calculated with reasonable care and skill taking account of all the information available to the builder at the date the contract is made including the nature and location of the building site.
The builder is obliged to provide copies of invoices to the owner as soon as they are received.
Be sure to include everything from screens on the windows to the type of roofing on the porch, and everything else you consider important.
A specialty contractor who is awarded the contract for some part of the building, as plumbing, wiring, or plastering, is to be known as a SUB-CONTRACTOR. There may be two classes of sub-contractors: those employed by the general contractor and those employed by the owner.
The work in general shall include all labour, materials, tools, equipment, transportation, temporary protection, and superintendence necessary to complete the entire building, including everything shown on the plans, and/or mentioned in these specifications, and everything necessary to make a complete and finished building whether shown or specified or not so shown or specified.
The plans and specifications as previously mentioned, together with the agreement signed at the time of awarding the contract, will be referred to collectively as the contract.