Most house quotes in Coimbatore follow one of three contract types. In a turnkey contract, one company designs the house, supplies the materials and builds it. In a labour contract, the contractor supplies the workers and you buy the materials. In an item-rate contract, you pay an agreed rate for each item of work, multiplied by the quantity measured on site. The real differences are who buys the materials, who designs the house and who carries the risk when quantities or plans change.
We offer turnkey design and build. If you choose a labour or item-rate contractor instead, we can still prepare your BoQ and check the work and the bills, as explained below.
| Turnkey (design and build) | Labour contract | Item-rate contract | |
|---|---|---|---|
| Who buys materials | The contractor, to the specification in the BoQ | You | The contractor, included in each item's rate |
| Who designs | The contractor's team | You appoint an architect and engineer separately | Your architect and engineer; the contractor builds to their drawings |
| How the price is set | An itemised BoQ for the agreed scope | A labour rate, by area or by stage; materials are paid for separately | A rate for each item, multiplied by the measured quantity |
| Who carries the quantity risk | The contractor, within the agreed scope | You, including wastage | You pay for measured quantities; the contractor carries the rate |
| Your time and effort | Lowest | Highest: buying, storing and checking materials | Medium: measuring work and checking bills |
| Changes | A written change order, priced before the work is done | You buy the extra materials and agree the labour again | New items need new rates agreed |
| Check before signing | Inclusions, exclusions, specifications and stage payments | Material quality, wastage and who supervises | How work is measured, rates for extra items and who checks bills |
| Suits owners who | Want one point of responsibility | Have time, supplier contacts and their own supervision | Have an engineer to measure the work and check bills |
What a turnkey contract covers
Turnkey means one contract and one team for the whole building. In our turnkey design and build service, that covers the soil test, the architectural design, the structural and services drawings, help with the plan approval, construction and interiors.
The scope is written into an itemised Bill of Quantities before work starts, and the price is fixed for that agreed scope. If you change something later, the change is priced in a written change order before the work is done. You deal with one team and one schedule.
The trade-off is direct control over purchasing. You choose the specifications and finishes, but you do not buy each load of materials yourself, so read the material specifications in the BoQ carefully before you sign.
Labour contract vs material contract
In a labour contract, sometimes called a labour-only contract, the contractor supplies the masons, helpers and other workers, and you buy the materials. In a material contract, the contractor supplies both the labour and the materials. A turnkey contract goes one step further and adds the design.
A labour contract gives you direct control over what you buy and from whom. It also hands you the work that comes with that control: ordering materials on time, storing them safely on site, checking quantities on delivery and keeping wastage down. If materials arrive late, the workers wait and the schedule slips.
You also need your own design. A labour contractor builds from drawings, so you appoint an architect and a structural engineer separately, and someone has to check that the work on site follows those drawings.
It suits owners who live near the site, know local suppliers and can spend time there, or who have an engineer they trust to supervise.
Item rate contract for house construction
In an item-rate contract, the contractor quotes a rate for each item of work: excavation and concrete by the cubic metre, steel by the kilogram, then brickwork, plastering, flooring and so on. The final bill is each rate multiplied by the quantity measured on site.
This works well when the quantities are measured properly, and it shows you the cost of each item. The risk sits in the measurements and in work that is not on the list. Before you sign, agree how each item will be measured, what rate applies to work not in the schedule, and who checks the bills before you pay.
Item-rate contracts suit owners who have their drawings ready and an engineer to measure the work and check each bill.
Which is cheaper?
A labour contract often looks cheapest at first, because the quote covers only the labour. That figure cannot be compared with a turnkey or item-rate quote until you add every material, the design fees, transport and wastage, and the time you will spend managing it all.
The fair way to compare is to price the same scope, at the same specification, item by item. That is what a BoQ does. Our guide to reading a construction BOQ shows how to put two quotes side by side and spot what one of them leaves out.
If you choose a labour or item-rate contractor
You can still have engineers on your side without a turnkey contract. We prepare detailed estimates and BoQs that set out the quantities and specifications, so you can price materials and compare contractors on the same basis.
Through our construction consulting service, we review contractor bids before you sign, inspect the work at the stages that matter most, such as footings and slab casting, and check each bill against the BoQ and the work actually done. We work for you, not the contractor.
Coimbatore and the Nilgiris
On a hill site the choice of contract matters more, because getting materials to the plot is harder. At the Pricol tea bungalow in Gudalur, the access route crossed a river. At Christus Rex Higher Secondary School in Ooty, material transport and heavy rain shaped the programme. Under a labour contract, you carry those logistics yourself, so plan for them before you choose. Our Ooty and Nilgiris page explains how we work across the district.
Questions to ask before you sign
- Who prepares the architectural and structural drawings?
- Which materials does the contractor supply, and which do you buy?
- What is excluded from the quote?
- How are changes priced, and are they agreed in writing before the work is done?
- How will quantities be measured, and who checks the bills?
- What are the stage payments, and what work must be finished at each stage?
Our list of questions to ask a building contractor covers the rest of a first meeting.
Talk it through with us
Bring your plot documents and any drawings to our Coimbatore office or Gudalur branch. We will explain how a turnkey contract would work for your house, or what you need in place if you prefer to manage a labour or item-rate contractor yourself.
Written by the team at Prasanth Associates.