At Impact Construction Sudbury, the type of Service Model ultimately comes down to how the work is going to be billed & scheduled. The service model is usually determined by the scope of work, although there are instances where either model is suitable for the job.

If you've been talking to contractors lately, you might have noticed each contractor does things a little differently. At Impact Construction we have two standard Service Models: The "Fixed Model", which we call Project Work and the "Hourly Model", which we call Service Work. These Service Models are fine tuned to help make jobs go smoother, and provide a more consistent experience. 

Project Work (Fixed Model)

It might go without saying, that Project work usually applies to larger scale renovations such as full bathrooms, kitchens, basement renovations, structural modifications, etc. But it can also apply to small jobs, too. Small jobs such as tiling an entrance or painting a room can also be billed and scheduled under the Fixed Model. Projects take up the majority of our schedule and can range from 1-2 day jobs to several months.

Here's how Projects work:

• Site visit consultation is required
• Defined estimates showing a fixed price
• We provide building material, labour, equipment & tipping as a fixed price
• Changes and surprises require change orders
• Pay a retainer to add to our queue
• Requires a deposit prior to work starting
• Invoiced based on milestones/ percentage of completion
• Priority Scheduling 
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The key advantage for project work is the fixed price, well defined scope and billing on job progress (not hours worked). Project work allows you to budget better with the fixed price and can usually result in a slightly better deal than service work, although both models generally have a similar cost in the end.

Service Work (Hourly Model)

Service work is a "time and material" arrangement that is billed weekly, on Fridays (and/or on job completion). Service work applies to smaller scale jobs such as repairs, and smaller replacements, but may also apply to other jobs when the scope of work is unclear, or if the time to complete is unknown. Service jobs are typically scheduled around Projects (continuity of projects is important) which means they can sometimes be scheduled on weekends or evenings.

Here's how we define Service Work:

• Site visit is not always required
• Doesn't normally include estimates, but if it does, its only for estimated hours and is not a fixed price
  
• All job costs are billable
• Truck charge (km charge)
• Changes can happen without change orders
• Work can be cancelled or put on hold anytime without reason (just pay the current bill)
• Pay a smaller retainer compared to projects
• Does not require a deposit prior to starting (with exceptions)
• Invoiced weekly, on Fridays (or on completion)
• Variable scheduling - scheduled around projects, sometimes after hours

The key advantages with service work are flexibility with the work scope and lower upfront cost. Service work will be the best value on smaller, service and repair style jobs, however, this model can be suitable in other cases as well.

Combining Service Models

Although we define two standard Service Models, there are situations where a job may use both. Renovations are not always predictable. Even with careful planning, once walls are opened or existing systems are exposed, unexpected conditions can surface. When that happens, we apply the most appropriate billing structure for that specific portion of work rather than forcing everything into one model.

A common example would be a Project operating under the Fixed Model. The scope is defined, the pricing is fixed, and the job is progressing as planned. Then something unforeseen is discovered, such as hidden water damage, structural deficiencies, outdated wiring, or improper previous installations. If the required repair cannot be reasonably quantified in advance, it may not be appropriate to issue a fixed price change order.

In this case, the original Project remains under the Fixed Model, but the unforeseen repair may be completed under the Service Work (Hourly Model).

Here’s how that works:

• The original Project scope remains fixed price
• The unforeseen repair is billed time and material
• Materials are charged as used
• No inflated contingency is added to “cover the unknown”
• Once the scope becomes clear again, we return to the Fixed Model structure

The key advantage of combining models is fairness and transparency. If something can be clearly defined, we give you a fixed price. If something is exploratory or uncertain, we bill it accurately based on time and materials. This prevents unnecessary risk allowances from being built into change orders and ensures you are only paying for the actual work required.

I hope this clears up the differences between Service Work and Project Work, and when they may be used together. If you still have questions, ask me in the comments below or send me an email!