The five preliminary costs builders most often leave out
Preliminaries are everything you have to pay for that never becomes part of the finished house. They are spent early, they are easy to forget, and when they are forgotten they come out of the only place left: your margin.
Here are the five that go missing most often on residential jobs in Australia.
1. Design, soil tests and engineering
A soil test and site classification come before the contract is even signed, because the designer, the engineer and whoever prices the job all need them. Without a classification you are guessing at the footings, and footings are not a good thing to guess at.
Designers usually charge on the size of the house. Engineers charge on the complexity of the block — a sloping site, a retaining wall or drop-edge beams all add to it. Get both quoted for the actual block rather than carrying a number from the last job.
2. Management and supervision
Your project manager, site supervisor and contract administrator are working on the whole job, not on one trade. If their time is not in the prelims it is nowhere, and the job looks more profitable than it is.
Putting supervision in the prelims also makes the price easier to explain to an owner, because it is visible rather than hidden inside rates.
3. Building certification and council fees
A private certifier manages the approval and inspection process and issues the approvals. Their fee usually includes council charges, and councils differ — every one has its own schedule, and they change.
Ask your certifier for a written quote for that job and that council before you sign. It takes one email and it is the difference between a number you can stand behind and one you hope is close.
4. QBCC home warranty insurance
In Queensland, home warranty insurance is a premium the builder pays to the QBCC on residential work, and the premium rises with the contract value. It is not optional, it is not small on a bigger job, and it is a common omission because it is paid to a body rather than a supplier.
Check the current premium table on the QBCC site when you price, not from a saved copy.
5. The QLeave levy
The portable long service leave levy applies over the threshold and is paid before work starts. The QLeave calculator gives you the figure in a minute.
Like the QBCC premium, it scales with the job, so a number carried over from a smaller job will be wrong.
Put them in the estimate, not in your head
The reason prelims get forgotten is that they are not trades. Nobody quotes them, so nothing arrives to remind you.
The fix is structural: give prelims their own cost centre and put every one of these in it as a line. In SmarteBuild they sit in your cost centres like any other work, come across on every job you duplicate, and show up in cash flow where they belong — at the start, before a single claim goes out.
That last point is the one builders feel. Prelims are spent before the first progress claim is paid, so they are your money in the job. Knowing the figure in advance is the difference between a tight month and a surprise.
SmarteBuild is Australian estimating and job management software for residential builders. Try it free for 30 days — no credit card, every module unlocked.