Signing a fit-out contract without independent commercial & contract advice?

This article isn’t an argument against ‘direct to client’ design & build. Quite the opposite. I’ve written previously about why D&B now suits the majority of workplace clients when properly structured.

What I want to address here is something different, a gap that has quietly opened up as the market has moved towards “direct-to-client” D&B engagement, and one that neither side seems to be talking about openly.

The appeal of D&B

Design & build now accounts for the vast majority of office fit-out procurement in the UK. Industry data suggests up to 85% of interior fit-out projects are now procured via D&B, especially when you include ‘detail & build’ within that category, which I do. It can be 30 to 40% quicker than traditional procurement, and for most occupiers, speed matters.

Clients are choosing it because it simplifies decision-making, reduces upfront professional fees, consolidates responsibility under one party, and shortens programmes. For a COO or Head of Workplace trying to get a project through board approval with a tight programme, it’s a no-brainer.

And in many cases, it delivers exactly what it promises. A competent contractor, a clear brief, a sensible budget, and a well-managed programme.

But in simplifying the structure, most projects are removing something critical without realising it…

A gap that should be filled

When a client engages with a D&B contractor directly, whether through an internal competitive process or a negotiated appointment, the commercial and contractual framework for that project is typically shaped by two parties: the client and the contractor.

In a lot of cases, it might be the first time a client has managed a fit-out and is therefore at a distinct disadvantage when reviewing contractor proposals and trying to agree ‘fair’ and ‘balanced’ contractual terms.

Pricing is developed by the contractor, and in many cases the only benchmarking that exists also sits with the contractor. The client is often ill-equipped for a line-by-line interrogation of what the bid actually contains, what assumptions underpin it, and where the risk allowances sit.

This also forms part of a wider discussion around how clients are preparing and signing off internal project budgets right at the start of their journey. I have covered this separately in other articles, but if of interest, you can take a look a recent video I published around formulating robust project budgets. Link

Then there is the contractual framework. Risk allocation on D&B contracts is often not stress-tested before signing. Key assumptions get embedded in contract documents without being challenged. Quite often contractors shy away from the industry standard forms of contract in favour of their own bespoke agreements, to adjust the risk profile of the project in their favour.

And underpinning all of these issues, is project governance. Ultimately, a client needs to document and demonstrate to their wider organisation that there has been a structured process followed to select, review and appoint a contractor.

Contractors are not the problem

I want to be clear here, contractors are not doing anything wrong. They are operating within the structure as it exists, and they are doing so rationally. A contractor’s job is to win work, manage risk, protect margin, and deliver a successful project. They are commercially incentivised to do exactly that. Expecting a contractor to independently challenge their own pricing, stress-test their own risk position, or highlight areas where the client might negotiate harder is not realistic. It is not their role.

The issue isn’t behaviour, it’s the structure.

When there is no independent party whose sole function is to interrogate the commercial, contractual and risk position before the contract is signed, a gap exists, leaving (in my opinion) both parties exposed.

Where projects get exposed

The consequences of this gap rarely appear during the pre-contract phase. They surface during delivery, usually in the form of commercial disagreements that both parties would prefer to avoid.

Scope gaps are probably the most common. The boundary between what the contractor has priced and what the client assumed was included turns out to be different. Not because anyone was dishonest, but because nobody independently mapped the two positions against each other before the contract was signed.

The contractor’s price was based on a set of assumptions, some explicitly stated, some not. When reality diverges from those assumptions, variations follow. Often adding additional pressure for the client who needs to report the cost increases to their board.

Most of these issues are not created during construction. They are locked in before the contract is signed.

The missing layer

What I’m describing is not a new professional discipline. It is an old one that has been gradually removed from the process as the sophistication of business development teams at contractors have soared, and the volume of ‘direct’ engagements have increased.

Independent commercial and contractual scrutiny before contract award.

Not as a blocker. Not as an additional layer of bureaucracy. An independent filter and a fresh pair of eyes that ensures the commercial position is sound (for both parties). Ensuring the contract reflects the deal both parties think they are signing, and the governance around the commitment is defensible.

Think of it this way. A client would not sign a lease without independent legal advice. They would not approve a business case without financial due diligence. Yet many are committing to construction contracts worth millions of pounds with no independent commercial or contractual challenge at all.

What this looks like in practice

A few real-world scenarios to make this tangible.

A contractor submits a competitive tender at £4.2m. The client’s internal budget is £4.5m.

The price looks good, so the client proceeds.

What isn’t identified is that £600k of that figure sits within provisional sums based on optimistic assumptions. During delivery, those assumptions unwind. Costs increase by £225k and the clients contingency disappears.

There is also a misalignment of assumptions with the contractor under the assumption the client was going to lease and supply their own zip taps and coffee machines. All down to a simple miscommunication during an early design meeting. (Another £45k additional cost during construction)

With independent review, those gaps are identified before contract. The contractor either adjusts the price or the client adjusts their expectations. Either way, both parties enter the contract with a shared understanding of what is actually included. Fewer surprises during delivery. Fewer disputes at final account.

Outcomes for both parties

For clients, the benefits are fairly self-evident. Defensible budgets. Stronger governance. Reduced risk of post-contract cost increases. Fewer scope disputes and better visibility of what the price actually contains before committing.

What people tend to miss is that contractors benefit just as much from this independent review process.

When a client has received independent commercial advice before contract award, approvals move faster because the client’s board has confidence in the numbers. There is less rework on pricing because ambiguities and gaps are identified early, not mid-tender or post-award. Disputes reduce because both parties are working from a shared, tested understanding of scope and risk. And client relationships strengthen because the delivery phase is not tarnished by commercial disagreements that originated before the contract was signed.

Strong contractors benefit from scrutiny, not suffer from it. The ones operating at the top level in the London market know this. A properly challenged contract sum is a properly understood price, and that makes delivery cleaner for everyone. Helping support the inclusion of robust commercials and ensure the contract is administered fairly during construction.

Where Fidgens sits in this

Fidgens’ operates as an independent QS and Employer’s Agent, typically brought in before contract award on direct-to-client D&B projects. Our focus is commercial, contractual and risk alignment, making sure the deal the client thinks they are signing is the deal the contract reflects, and that both the budget and the governance around the appointment are sound.

We are not there to create friction or ‘screw down’ contractor costs, quite the opposite. We are there to make sure the commercial foundations are solid before a client commits to a number. This tends to make everything that follows more straightforward for both sides, and maximise the likelihood of a successful outcome.

We can ‘plug in’ to an existing project and move at pace, helping support the speedy execution of a robust building contract. Most importantly, we provide you with the independent financial governance you require for internal approvals.

Closing thoughts…

‘Direct-to-client’ design & build isn’t the problem; it’s a powerful and much needed procurement strategy in the London market.

The problem is proceeding without independent commercial support before contract award.

Free PDF Checklist: 50 Items to check before signing a fit-out contract

Download our 50 Item ‘pre-contract signing’ checklist here.

If you’re a client about to commit to a D&B contract and want the commercial position independently reviewed before you sign, it’s worth a conversation.