Q: Last summer we signed a proposal with a local contractor to renovate our kitchen and two bathrooms within the existing footprints. The proposal totaled more than $50,000 not including the cabinets. Listed under the Scope of Work was all necessary plumbing (e.g., “Install shower drain and fixtures”) and electrical work (e.g., “Install under-cabinet lighting”). Now, on the … [Read more...] about Is a Signed Proposal a Legal Contract?
Estimating & Bidding
How to Avoid Changes, Extras, and Surprise Charges on Your Next Job Q: We were hit with a $20,000 extra for changes in our new home after the framing was completed. We had a fixed-price contract. The changes including a revised stair layout (U-shape to to L), removing some windows, and moving a bathroom. The framing was completed, but no plumbing or electrical was done. Does … [Read more...] about Is Our Contractor Overcharging Us?
Q: Hi. We received an estimate from a roofing contractor for $10,500. When the job was done, he gave us a bill for over $11,000. He said that the roof took an additional square of shingles and required some repairs to the sheathing. It was our belief that the original “estimate” was the full cost of the job, not just a best guess at the cost. Who is right here? - Alex A: … [Read more...] about When Is An “Estimate” a Binding Contract?
Q: At the end of remodeling my home (original contract price $149,000) I was hit with an extra $24,500 for items I was unaware of. The contractor said every time that they were ordered by my architect. But I don't have an architect! I only had the architect to draw up the original plans but not stay involved with the project. Some of the items are door change, tearing down … [Read more...] about Should I Pay Extra Charges at End of Remodeling Job?
Q: Where do I look for hands-on estimating training? I started a carpentry business and I clearly realized that my weakest point is that I don’t know how to do takeoffs and estimate material and labor costs. This prevents me from bidding on jobs and creates work-flow issues. Thank you for your time. –H. Jackolev A: There are a number of places to learn the basics of … [Read more...] about Where To Learn Construction Estimating?
Q: Please explain the difference between General Conditions and Overhead & Profit when you want to separate them in a proposal for your client. What items fall into each category? Also, what percentage is the norm for General Conditions in a proposal? -- Tonka S. A: Let's first define terms. There are two types of overhead expenses. Some contractors mix the two together, … [Read more...] about How Much Markup For General Conditions, Overhead & Profit?
Bryn asks: On a cost-plus bid, what be an average to high-average markup to expect from a contractor with a strong reputation for doing good work? What is the highest percentage one might expect? Are there other factors in comparing bids? Steve Bliss, of BuildingAdvisor.com, responds: There is no industry standard for markup percentage and the numbers vary a lot depending on … [Read more...] about Cost-Plus: How Much Markup?
Brad asks: On remodels, are supervision costs typically included in contractor's percentage fee or are these billable? Steve Bliss, of BuildingAdvisor.com, responds: There is no definitive answer to your question as different contractors handle this issue differently. Some bill for all supervisory time, some bill for only specific types of supervisory time, and some bill for … [Read more...] about Cost-Plus: Are Supervision Costs Billable?