Advantages of Local Contractor
20% cost reduction by using Local Contractors
In our experience in ASEAN, the difference in construction cost may exceed “20%” when Tendering the exact same building between an international contractor and a local contractor.
So why is there a “20%” difference in construction costs between the international main contractor and the local contractor? In addition, we will explain the merits and points of using local contractors.
The above figure shows a case of directly requesting a International Contractor and a Local Contractor.
Referring to the figure, the major factors of the cost difference are the following 3 points.
- The unit price by International Contractors is higher than the unit price by Local Contractors
- Indirect costs, office maintenance and management costs, and profit margins of International Contractors are higher than the indirect cost by Local Contractors
- International Contractor pays administration fee to the Head Quarter
Tender Result managed by Plus PM Consultant
(about 5,000m² office and warehouse）
The difference between International Contractors and Local Contractors was an average of 26% and a maximum of 37%.
Total construction cost is approximately 3% on average for RM10,000,000 (270 million yen) scale project and the difference in the amount of RM500,000 (9,600 yen) and the maximum value of about RM5,500,000 (150 million yen) is very large.* As of October 2018
We bring out the cost competitiveness of Local Contractors and minimize risks
Although it is possible to reduce the cost to 20% by using a local contractor,
- Is the quality up to clients' requirement?
- Able to follow & maintain the overall schedule?
- Is the maintenance after completion of the building is efficient & effective?
- ... etc.
Plus PM Consultant supports Clients project
In Plus PM Consultant has large number of employees who has experience of project in ASEAN.
- Engineer worked as a Local General Contractor
- Engineer worked as a Japanese General Contractor
We provide safe & reliable support specifically on the local conditions.
The systematized methods in each stages of the plus PM Consultant
Tender Stage
At the Tender stage, it is very important to present various contract conditions. Only those companies that have agreed to the conditions described in the tender guidelines can participate in the tender.
Ex) Tender Bond ,Defects Notification Period, Insurance, Payment Terms and Performance Security, Delay Damages (LAD) for the whole Works, Warranty, etc.
Tender Specification Document
Tender Specification Document
Contract Stage
At the contract stage, we confirm the contract price and payment terms, negotiate and check quality control and delivery terms, and guarantee penalty in accordance with the tender outline before signing the contract. It is an important to minimize the risk and eliminate the trouble in the future.
L.O.I (Business start-up instruction) materials
Contract Terms and Conditions(FIDIC)materials
Construction stage
At the construction stage, our staff will be based at the site for management. We inspect not only the quality and schedule, but also the safety and the environmental situation, and if there are any problems, we grasp them at an early stage, and carry out corrective instructions immediately.
During the payment stage, we evaluate and confirm the consistency with the site.
We will be based on the site and manage the inspection
Instruction of quality improvement
Handover Stage
During the Handover phase, we will follow the instructions carefully, checking the quality and schedule until the complete delivery. We then review and negotiate the V.O quotation for the additional items under construction stage, and make sure that everything is in perfect condition.
Handover inspection
Assessment of V.O
How this benefits for Clients
With your project managed by a Plus PM consultant, you will feel safe and experience cost savings as well.
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