Tendering a strata defects rectification: scope, quotes and comparing like with like

When a defects report lands on a committee's table, the natural next step is to ask for quotes. That is also where many rectification projects go wrong. If the contractors are not given the same scope, the quotes are not comparable, the cheapest one often leaves out the hardest work, and the variations begin on day one.

This article sets out a process that helps a committee, strata manager or developer get quotes that can actually be compared, and a contractor who will do the work properly. It follows on from what to do after a strata defects report.

Start with the duty

Under section 106 of the Strata Schemes Management Act 2015, the owners corporation must properly maintain and keep in a state of good and serviceable repair the common property. This is a duty, not an option, and the cost of delay is usually higher than the cost of the repair. Your strata lawyer can advise on the specific position, including any time limits on claims for defects against the original builder or developer.

Step 1: Define the problem before asking for prices

A defects report or an inspection tells you what is wrong. A scope tells a contractor what to do about it. Those are different documents.

For anything beyond a simple repair, engage someone independent to write the scope: a building consultant, façade engineer or other suitably qualified professional. They can:

• confirm the cause, not just the symptom (a leaking balcony may need a new membrane, or may need drainage and falls corrected first);
• set out the method and standards the repair must meet, such as the relevant Australian Standards and the National Construction Code;
• identify what needs approval, such as a development approval, complying development or a certifier's involvement; and
• specify inspections, tests and hold points.

An independent scope is also a protection if the work later becomes the subject of a claim. It separates "what needs to happen" from "what a contractor chooses to price".

For small, well-understood repairs, a clear written brief from the strata manager with photographs and a site inspection can be enough.

Step 2: Write the scope so it can be priced

A good scope document includes:

• Location and extent. Which units, elevations, balconies or areas, with drawings or marked-up photographs.
• Method. What is to be removed, repaired or replaced, and in what sequence.
• Materials and standards. Products or performance standards, rather than "to match existing".
• Access. Scaffolding, swing stages, hoists, working hours and residents' access.
• Inspections and tests. What will be checked and by whom before concealed work is covered.
• Records. What the contractor must hand over at completion.
• Programme. Target start, duration and any constraints such as school holidays or events.
• Exclusions. What is not in the scope, so contractors do not guess.

Step 3: Choose who to invite

Invite a small number of contractors, commonly three, who can actually do the work. Before inviting them:

• check licence, categories and history, following checking a builder's licence in NSW;
• ask for certificates of currency and, where relevant, the details in builder insurance in NSW;
• ask for comparable past projects and referees, using the questions in how to judge a builder's past projects; and
• confirm they have capacity to start when the scope needs them.

Give every contractor the same documents, the same site access, the same deadline and the same chance to ask questions. Share the questions and answers with everyone.

Step 4: Ask for the same quote format

Request prices in a standard schedule so that you can lay them side by side. At a minimum:

Our article on reading a building quote explains why each of these matters.

Step 5: Compare like with like

When quotes arrive, the headline price is the least useful number. Create a comparison with these steps:

1. Normalise the scope. Put each contractor's inclusions and exclusions against your scope and mark anything missing. A low quote that omits scaffolding or testing is not low.
2. Check provisional sums. A quote with large provisional sums is a guess. Compare how each contractor will measure and adjust them.
3. Compare methods. If a contractor proposes a different method or product, ask why, and ask your consultant whether it meets the specification.
4. Compare programme and staging. A faster programme may mean higher disruption or a less careful sequence.
5. Compare quality control. Which quote includes hold points, inspections and a record? Our article on hold points and the handover record describes what to look for.
6. Look at the people. Who will supervise on site, and how much of their time is allocated?
7. Ask clarifying questions in writing. Give every contractor the chance to fix gaps, and apply the same rules to all.

A large gap between quotes is a signal to investigate, not an opportunity. Either someone has misread the scope, or someone has priced in a shortcut.

Step 6: Contract it properly

Put the agreement in writing, with:

• the scope and drawings attached;
• a progress payment schedule tied to completed, inspected stages. For residential building work, the NSW Government sets rules on written contracts, deposits and progress payments, described in its guide to contracts for residential building work; check which rules apply to your work;
• a variation process: nothing extra is done or paid without written instruction and agreed price;
• insurance and licence evidence as conditions;
• the safety arrangements described in site safety: what owners should expect;
• the records to be handed over, and that final payment depends on them; and
• a defects liability period.

Check whether the spend needs owners' approval at a general meeting, and what your by-laws and the Act require. Your strata manager or strata lawyer can advise.

Step 7: Manage the job

Appoint a single point of contact for the owners corporation. Have your consultant inspect at the agreed hold points, keep a log of instructions and variations, and communicate with residents before and during the work. Keep every record. It becomes part of the maintenance plan and the building's history.

Working with us

We work alongside strata managers, committees and consultants on inspections and repairs. If you would like help preparing a scope or pricing a rectification project, get in touch or see our services.

Sources

• Strata Schemes Management Act 2015 (NSW), section 106, NSW Legislation
• Contracts for residential building work, NSW Government

This article is general information, not legal or engineering advice. Procurement and approval requirements vary with the scheme, the work and its value. Get advice from your strata manager, strata lawyer and a qualified consultant. Full website disclaimer