BuildBinder Blog

Should You Offer Builder Allowances to Your Clients?

There are a few things that will make any construction project go smoothly. High quality work, for example, should be priority number one. Following that, strong adherence to deadlines, an open line of communication and transparency throughout the project lifecycle can ensure complete satisfaction for all stakeholders.

Each of these elements ensure superior service to clients and peace of mind for construction teams, and builder allowances provide yet another area of opportunity to deliver high quality projects, on time and on budget.

Why Builder Allowances?
Builder allowances are intended to be an added convenience for the client. They can help solidify the professional relationship being built and inspire the loyalty needed to encourage repeat projects.

Let’s say a client wants to find their flooring or countertop materials during the construction process. They may not know the specifics of what they want yet, but they still want the materials cost to be considered within the bid they request. Your firm might offer a builder allowance for these materials, so that you can begin work, without having this particular detail ironed out.

The Challenge of Offering Builder Allowances
One of the challenges of builder allowances is that as construction professionals, your firm will generally know where to find all materials needed, at a high quality and reasonable cost. When left in the hands of the client to decide, your firm no longer has a clear view of the usability of the materials, which could affect the end result of your project. An additional challenge of builder allowances is scheduling. A client may not place the order for the materials in a timely manner, or they may order the incorrect materials, which then require return and reorder. This could be a critical hindrance to your overall project schedule.

Finally, in many cases, builder allowances allow the potential for subcontract work, during the construction project. This poses the same concerns as determining the usability of materials, given the fact that your firm may be locked into less than quality work, rather than the quality and cost-effective contractors your firm has built relationships with overtime.

While builder allowances have their advantages, they can easily create unforeseeable challenges and compromise the professionalism of your construction project. A good best practice is to provide clients with a list of your approved suppliers and contractors, and act as the expert advisor for materials and labor during the construction process.


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