Prague warehouse renovation: contingency on CZK 9,955,000 budget

B

book.open

Construction professional
The two quotations are too far apart to support a reliable contingency yet. They are meant to cover the same 200 m² Prague warehouse, within a preliminary CZK 9,955,000 budget, but I suspect the contractors have interpreted the brief differently.

The work includes staff kitchen and bathroom areas, new floor finishes, decoration, an electrical assessment and some energy improvements, without an extension. My concern is what each bid leaves out: remedial electrical work, opening up, waste removal, material lead times and coordination between trades.

Would you first normalise the bids into a common schedule, commission further investigation, or retain a larger reserve until the use and services are confirmed? Financing costs will be tracked outside the building-work allowance.
 
Before choosing a contingency, put both bids into the same line-by-line schedule. “Electrical checks” could mean an inspection in one price and inspection plus remedial work in the other. The same problem applies to plumbing and energy upgrades.

For an older warehouse with limited investigation, I would initially allow around 15–20%, then reduce it only after opening up suspect areas and clarifying exclusions.
 
What will the warehouse be used for after renovation? A kitchen and bathrooms could mean light staff facilities, or they could be part of a more intensive conversion. That distinction may affect services, fire-related work and permit timing in Prague. I would establish that before treating either contractor’s number as comparable.
 
Nina’s question matters. I would also ask each contractor to define the electrical allowance precisely: distribution board, cabling, outlets, lighting, testing and making good after new runs. If they have only allowed to inspect the existing installation, the eventual repair bill is still an unknown rather than part of the CZK 9,955,000.
 
I’m not convinced a larger contingency is the first solution. A percentage does not repair an undefined scope. Spend some effort now on moisture investigation, drainage routes and plumbing access, particularly where new bathrooms and the kitchen are intended. Once those are understood, the remaining contingency becomes more meaningful.
 
For comparing the contractors, make a simple table with quantities, specification, labour, materials, access equipment, waste removal, protection, testing and making good. Add a separate column titled “excluded or assumed.” Ask both bidders to complete the gaps rather than merely confirm that everything is included. Their assumptions will probably explain much of the price difference.
 
Sequencing could create a costly trap here. Any roof, moisture or external-envelope work should be settled before paint and flooring. Main electrical and plumbing routes need to precede bathroom and kitchen finishes, and testing should happen before everything is closed. I’d ask for a programme showing dependencies, not just start and completion dates.
 
Also ask which materials are already specified and which are placeholders. Long-lead electrical items, windows or energy-upgrade components could move the programme even when their purchase price is allowed. The bids should state who orders them, when decisions are required and whether substitutes need approval.
 
On financing, I agree with keeping it outside the works contingency. Track construction risk and time-related financing exposure separately, because a permit or procurement delay can increase the latter without changing the contractor’s scope. A monthly cash-flow forecast from each bidder would make the timing difference between the offers easier to see.
 
“Moderate energy upgrades” is another phrase I would not leave in a contract. Does it refer to insulation, doors, windows, heating controls, lighting, or only selected measures? Define the actual components and the condition of the existing envelope. Otherwise one bidder may have priced a meaningful package while the other has included a token allowance.
 
No extension does not necessarily mean no structural uncertainty. New service openings, added ceiling loads, altered internal layouts or a warehouse floor receiving different finishes can still expose issues. A focused structural assessment should identify what is genuinely untouched and what needs verification; it does not have to assume a major intervention.
 
Moisture deserves its own written response from both contractors: where it was observed, what testing was done, whether the proposed floor build-up tolerates it, and who pays if damp substrate is found after removal. Covering a warehouse slab too quickly can turn a hidden condition into damaged new flooring.
 
Combining the points above, I’d request three revisions from each bidder: a priced scope matrix, a programme linked to decisions and permits, and a list of provisional allowances. Then compare the fixed work separately from uncertain items. If one contractor refuses to expose assumptions, the lower or higher total alone tells you very little.
 
One final practical step: agree how discoveries are documented and priced before work begins. Require a written description, cost and programme effect before non-emergency extra work proceeds. That will not eliminate surprises, but it prevents hidden conditions, design changes and contractor omissions from being mixed together later.
 
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