Without going into detail is the thing that came across your desk anything to do with the price of materials when we leave the E.U and maybe only to be compounded by us leaving under no deal?Generally there is a scale as to the profit levels within large builds. On the supply side the end contractors are operating at higher GP percentages. For example on a (cost) £100k project at subcontractor level the GP percentage will be around 20% hence a total of £125k. (GP differs to mark up as you probably know). Main contractors will not be able to mark up the job by a further 20% as they will not get the contract, it will not be competitive. At tendering stage the project is sent out to around 15-20 large M&E main contractors, and the estimator/QS/project people role is to gather 3-4 quotes per part of the specification they're given. All in all the total in this example will be £4m worth of project at cost, at 5% Gross Profit this will total around £4,210,500.
These main contractors will take £210,500.00 for the sake of organising and running a job. Anything out of specification or changes that can be made will be charged extra to the client. The Main Contractors also hold a retention on jobs for 12 months or so, lets call it the defect period. Having another 3-5% in the bank gathering interest is also another income stream.
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