Louise writes: We submitted detailed plans and specs for a substantial remodel of a beach house to five builders: two “big name” builders, two midrange, and one “mom and pop,” but very highly regarded, small builder. This is our first time going through this process and we (naively) assumed that we would get back five proposals that we could compare easily. Wrong! Some are extremely detailed, others are very general, and none appear to have included everything shown on the plans. To make sure that all bidders price everything in the plans, we are considering requiring every bidder to confirm in writing that their proposal “includes all items listed in the Plans and Specifications, except where expressly excluded in this proposal.” Does that seem like a good idea? Any other advice about how to compare bids that are not apples to apples?
Steve Bliss, of BuildingAdvisor.com, responds: Welcome to the real world of construction, which like most things, doesn’t live up to the ideal world in which all bids would provide perfect apples-to-apples comparisons.
It sounds like you did your homework and submitted detailed plans and specs, in which case your bidders, at least in theory, were bidding on the same project. In a formal bidding process run by an architect or construction manager, each bidder would typically also do a walk-through at the site to ask questions and clarify any issues that are unclear, missing from the plans, or in conflict with the building code, and would need answers before submitting their bids. The walk-throughs may be done separately or all at the same time.
In your situation, I think your idea to add language asking the bidders to confirm that their proposal includes all items except those expressly excluded is a good one. You might also want to invite the bidders you are still interested in to a question-and-answer session, preferably a “walk-through” meeting at the site, to make sure everyone is on the same page.
Once you have narrowed your choice to one or two contractors, a second meeting is in order to go over the bids in detail. (In your situation, you could combine this with the walk-through meeting since you already have the bids). At this meeting, ask the contractor for ideas they might have for reducing costs. Also ask each bidder directly if he is aware of anything missing from his bid or any additional costs that he anticipates even though it is not in the plans or specs. This may be something required by code like a railing or support post, by common sense like a linen closet, or by good building practice like doors that don’t clash or upgraded flashing around windows. This is also a good time to review allowances for finishes, appliances, fixtures, etc., to see if they are realistic.
A reputable contractor would rather identify potential problems and extra costs before starting than have to wrestle with the client later over change orders and upcharges.
You and the contractor will essentially be business partners in a complex, financial relationship for the duration of the project, so this type of discussion will help both parties decide whether you will be a good fit for working together and working through the sort of problems that invariably arise on any large project.
The variety of bids you received may reflect, among other things, the level of integrity, interest, and professionalism among the various bidders. A quick-and-dirty high bid sometimes indicates that the bidder doesn’t really want/need the job, but if they do get it want to make a big profit. An unusually low bid may indicate either a lack of business experience (from a mom-and-pop outfit) or a less-than-honest effort to win the job and then make up for the low bid with change orders and extras. A very low bid could also indicate a mistake or misunderstanding on the part of the bidder, so make certain that their bid includes all the work you want done – or expect problems later on when the mistake comes to light.
The bidding experience is an important step that can help you evaluate the contractors. If they provided a sloppy, incomplete, and poorly documented bid, then you can expect the same behavior throughout the project. Conversely, if they submitted a highly detailed, well organized bid, you can expect more professional performance during construction (and after, if there are call-back or warranty issues).
There are no hard and fast rules. In some cases, the less professional bid is simply a reflection of a lack of business experience and savvy. The contractor may be a great craftsman with high integrity, and will provide good work at a lower cost (due to lower overhead), but you may need to be more actively involved in the project to make sure things are done the way you want.
On the other hand, a professional bid with detailed plans and specifications may go a long way toward a satisfying experience, but is no guaranty of a trouble-free project.
The best contract documents in the world are no substitute for finding a trustworthy contractor with the necessary experience and a good track record. Looking at past jobs and speaking with past customers is a critical step in this process. At the end of the day, you will be relying on the integrity and skill of the contractor to get the job done correctly at a reasonable price. In every large project, there will be some problems and misunderstandings along the way, and the integrity of both parties, along with good communication and willingness to compromise, will be important for a successful experience.
Once you have narrowed down the field to two or three bids, and you have done what you can to make them more apples-to-apples, you should make your final selection based on price, the quality of the bid, and the quality and integrity of the builder — an intangible variable, but the most critical, in my opinion.
You many need to make adjustments to the bids to account for differing specs, different allowances, and different exclusions. You may wish to hire a construction manager or architect to help you evaluate the bids. However, if the numbers are not far apart, I would forget about the low bid and go with the contractor whom you trust the most to work with you in good faith to provide high quality work at a reasonable price. The few thousand dollars you thought you are saving with the low bid often vanishes as the job progresses and you discover items omitted from the bid either intentionally or accidentally.