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Remodeling Success Tips, Issue #011 -- Dissecting Construction Bids
November 14, 2010
Dissecting Construction Bids
Welcome to this edition of Remodeling Success Tips. In this edition we will be looking at dissecting construction bids.
Table of ContentsIssue #011 - November 13, 2010
Dissecting Construction BidsOk, so everyone has heard that you should get a minimum of three comparable bids before selecting your contractor. But what does this really mean to you? And how do you go about it? Unless you ask for the right information from each, you may be comparing apples and oranges; especially on a remodeling project.
This is probably one of the most difficult challenges on any construction project. Especially if you are not accustomed to reading quotes (bids) and are not familiar with the language.
It is imperative that you not only ask for specific information, but also how you want to see it in print. What type of breakdown will allow you to see the important things that will not only help you decide which company to work with, but also what items you may or may not want to do based on cost.
The only way to do this is through an itemization of the bid.
There are many contractors who will balk at this however, those that are legitimate firms with open book policies will not. You have a right to know what you will be paying for.
So start with the information. What are they using to create the bid? Is it from plans and specifications; on a renovation is it via a walk through of the premises or some other written document?
There are so many variables that come into play that you must have a specific enough list or set of plans for a competitive bid process to take place. Otherwise it is going to be a waste of everyone’s time as their will be little to no comparing the bids.
Even with plans and specifications, there is a danger. If something is not on the plans or in the specs, then you can be sure they will not own it in their contact. The worse case scenario is that they don’t acknowledge it during the bidding process and you get caught by surprise when it is time to do the work. This is an unscrupulous way that some contractors go about getting extras.
This is the best method however for comparison bidding and the more information on the documents, the more accurate the estimate.
It is common practice for reputable firms to exclude items they know will be needed for lack of information. This is fine since you will know it is not in there and you can work to develop the number with the contractor.
Another way this is handled is that the contractor will call out an allowance. This is also fine as you know what amount is in there and can decide if you want to increase or decrease the allowance.
An example would be wood flooring. If the plans call out for wood flooring but do not specify the size or type, the contractor may put a square foot allowance in for that item. If you choose Plain Sawn Red Oak, chances are you will be somewhere in the budget; if however you choose something like American Walnut or Cherry, you can be sure it is probably going to cost more than the allowance.
The more that is known up front, the more itemized a list you can ask for. The planning of the project is the single most important investment you as an owner can make. It will pay huge dividends in the end especially financially.
What To Ask ForAs an example, if you are requesting a quote to for an interior renovation. You must ask for a complete breakdown in order to be able to as they say "compare apples to apples". This is called the "scope" of work.
If you are only given an overall number, then you cannot know for sure what is included or excluded.
Let’s assume you are preparing to remodel your kitchen and all work will be contained to the interior of the house with no exterior changes or penetrations. You should request a breakout of the following:
In addition to the previous, there should be an indication of what is not included. All standard fasteners should be included, daily clean up should be included....
Find out what is not in there! Ideally, they will be handling everything but if they are not, you will be!
If you want them to provide the appliances, electrical or plumbing fixtures (and there is good reason you do)*, give them the model numbers.
If you have not selected them, ask them to include an allowance so there will be some money budgeted for them.
If a contractor refuses to give you information, run the other way. You are entitled to this information. It is the only way you can be sure all bidders have included everything you have requested.
If you have questions; ask! You don't want to find out later. Do not feel uncomfortable about asking. Again you have the right to have all your questions answered before handing out a contract.
Be as diligent in your pursuit of information regarding bids as you should be in selecting the firm.
* Why Let Contractors Provide FixturesContractors and tradesmen usually can purchase fixtures and appliances at a trade discount that you cannot.
They will generally mark up the value of the item to cover their paperwork and logistics of securing them.
The cost of the fixture at the trade discount plus their mark up is generally close to the price you will pay from the showroom; many times lower.
If they purchase the fixtures, they are responsible for ordering, tracking, making sure they are not damaged upon arrival and most importantly they are responsible for it if it does not function.
If you purchase the items, you will be responsible for the above.
It is generally in your best interest to allow them to purchase them.
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