Why low home mods quotes could be costly

The focus on value-for-money criteria in home modification schemes is having some unintended consequences, writes Dr Andrew Martel.

The adoption of the United Nations Convention on the Rights of Persons with Disabilities by Australia has shifted service provision in disability and aged care to a focus on a person-centred care model.

This model emphasises enabling people, as full citizens, to continue to live in their own homes and communities. Consequently, home modification schemes are increasingly important in adapting people’s homes to the changing needs of ageing residents, or those with disabilities. However, assessment of the quality and effectiveness of these schemes rarely consider the position or reality of the domestic building industry.

Given this blind spot, how can a person with a disability or age-related issue effectively communicate their housing needs to a builder? How might they engage with a building contractor given the often substantial lack of understanding by each party on what the other’s concerns are?

To begin to answer these questions, it is necessary to highlight the parties involved and identify what their typical strengths and weaknesses are. Builder-client relationships are fundamental to any construction project, but in the case of home modifications, clients or their families have a good idea what they require, but maybe not what alternatives are available, have not dealt with builders very often, and usually have tight budgets.

Builders are usually very small business enterprises who may not have dealt with disability or ageing issues before, or alternatively may focus solely on that type of work. So, knowledge of working with disability is very unevenly spread across the industry.

Builders will typically only deal with a client once, and will have many jobs going on at the same time. Government-supported home modification schemes have two additional key stakeholders – government departments and occupational therapists. OTs are good at working with their clients, but dealing with builders is not the main focus of their work. They do however, frequently deal with small budgets and quick turn-around times, have many compliance requirements, and rarely have time for follow-up visits. External funders, usually government agencies, also have many compliance requirements, and since funding is almost always tight, have ‘value for money’ as a key concern. Typically, they are not directly involved with builders.

Several issues arise as a consequence of these strengths and weaknesses. The most critical is the knowledge gap that exists between the parties. Clients are unsure about building industry practices, qualifications (there are 29 different categories of building work), and the regulatory environment. Builders, even those specialising in home modifications, may not understand the practical implications of disability or age-related issues, which can be problematic.

As a result, the collective response has been to develop a system that relies on tendering for multiple quotes on often small jobs. This is logical in many respects, as cost pressures and uncertainty are always present; multiple quotes assure clients and funders that they are paying the market rate. So, the necessity for multiple quotes has become a governance requirement for most funders, to satisfy their value-for-money criteria. It has also become standard practice for many OTs, as it helps to ensure a quicker response rather than issuing a sequence of quotes or inquiries.

However, there are potential unintended consequences of this value-driven system. Specifically, some regulations have dollar value trigger points. In Victoria, this includes small plumbing jobs under $750 not requiring a certificate of compliance; the use of ‘major domestic building contracts’ being a requirement for work over $5,000, and work over $16,000 requiring domestic building insurance, all of which cost time and money to administer and bring additional legal obligations. So, the temptation for builders to quote low – enabled by the common interests of clients, OTs and funders – potentially incentivises the avoidance of a series of regulatory requirements designed to protect consumers in case of unsatisfactory work.

In addition, jobs sent for quotes from different government agencies have different levels of likelihood that they will actually eventuate, different client bases, and different funding levels. Well-meaning, skilled, and thorough builders (whose quotes reflect this) may be driven from the field by cheaper competition.

If the working practices of OTs and funding agencies tend to reinforce the biases of a client group unfamiliar with dealing with builders, what can help? National coordination between states and the many different government funding agencies will help to professionalise and expand home modification work among domestic builders, and the establishment of locally-based approved panels of builders can improve confidence in quality of work. The involvement of an architect or other building professional in the early assessment and tender stage working with the OT, also significantly improves the knowledge transfer and trust between the parties involved.

In the meantime, although it restricts choice and possibly increases cost, engaging a builder who has experience in dealing with externally-funded home modifications will certainly help. And be wary of low quotes.

Dr Andrew Martel is a lecturer in construction and architecture in the Faculty of Architecture, Building and Planning at the University of Melbourne, with a research background in housing. His recent research has investigated the implications of the NDIS for the housing industry in Australia. Dr Martel was a keynote speaker at the Home Modifications Australia National Conference in August.

This article appears in the current Spring edition of Community Care Review magazine.