Re: Bidding contract question.

Posted by Pops1532 on February 02, 2014 at 08:34:33 from (98.227.133.60):

In Reply to: Bidding contract question. posted by oldtanker on February 01, 2014 at 08:49:10:

I'm a contractor. Nearly all of my work is done under contract. When I bid a job, I spell out as best I can exactly what the cost will be. Sometimes the client hasn't made fixture choices so I include an allowance for those items. The way the allowance works is like this...if I allow $1200 for a counter top and the actual cost of the top is $1000, the client gets a $200 credit off the contract price. Conversely, if they pick out a top that costs $1400 they'll see an extra $200 added to the final bill. The key to using allowances in bids is to use realistic allowances. I know a contractor that that low balls their allowances. That looks good to the people that are strictly price shoppers until they find out they can't get anything at the prices allowed. The way that contractor is using allowances is basically a version of bait and switch.

I want my bids to reflect the actual cost to my clients as possible. If the client wants to add or change something, the final price will be adjusted accordingly. It's a rare occasion for me to take a time and material job. I've seen contractors abuse that system and the problems it causes with their customers. I don't want my clients to have any surprises!

I did a lot of work for the military back in the 1980's. When you bid on a government project, especially military, there are very stringent specs that have to be met. If someone does shoddy work on government projects it's because the inspectors didn't do their job.

I've heard various theories over the years. Some say get multiple bids and go with the cheapest. That can be very short sighted. Especially in residential work where the client usually doesn't have rigid specs. Several years ago I was asked to bid on a room addition. I met with the home owner and took notes so I could prepare a bid. As I was getting ready to leave he let it be known that he was getting other bids. No problem. Then he went on and listed the EIGHT contractors he had already gotten bids from. I mentioned that getting eight bids was quite uncommon. He said he was getting even more bids in hopes of getting a cheaper price. I told him I wasn't interested in bidding on his project. He didn't understand. I tried to explain that the only way I would come in with a lower bid is if I were to forget something or make a mistake when figuring the job, and I just as well stay at home and not lose money.

The only other way to bid the job lower would be to figure on cutting corners and I don't do that.

Some say get three bids and throw out the high and low. That's an incredibly stupid way of doing things!

You should ALWAYS go with the BEST bid. Say you get three bids. What if none of them are good bids? What if they are all good bids? The customer needs to weed out the bad bids. Toss out the ones that are vague, or the ones where the contractor bid something other than what the customer specified. Customers need to check the reputation of the contractor. Do they start projects on time? Do they finish projects in the specified time? Are they insured? Are they licensed? Are they bonded? Will they get a building permit, or will they dodge the building department hoping to sneak something by that doesn't meet code? How long has the contractor been in business? Will the contractor still be around in the future to remedy warranty issues?

I did a bathroom remodel for an elderly lady. She knew up front exactly what it was going to cost. During the course of the project she mentioned a couple of times that she had her other bathroom remodeled a few years prior at less than half the cost of the one I was doing. I went and looked at it. The workmanship was horrible. I asked the client who had done it. She told me. Then I asked why she didn't have him do the project I was doing. She said he was no longer in business, then paused. Then she said, I get it now. Then she said, your work sure is nice. The next year I did two more projects for her.

We built a room addition for my parent's neighbor. Many years later I was asked to bid on another project. A few days after submitting my bid I got a call from the customer. She had several questions. I answered them and she said she'd get back to me. Less than 10 minutes later she called back to say I had the job. Turns out she had gotten another bid that was half the price of mine. She called her brother over who worked in construction. He read both proposals and made a list of questions for her to ask both contractors. It turns out the other guy was going to skimp on the thickness of the concrete, plus he had fudged the dimensions a bit to further save on material. I've since done two more major projects for that client.

To answer the OP's question....contract price or time and material makes no difference in the quality of my work. I can't say that for everyone though.

A friend recently had a pole barn put up. He had gotten bids from 4 contractors. He specified the building size, door and window sizes, etc. The 4 contractors each bid different size buildings, different window and door sizes....

Three of them didn't want to bid the same specs as the customer wanted. They didn't want the customer to be able to compare bids head to head. The guy hired the one contractor that bid exactly what he wanted. That guy was also the highest priced.

IMO he got the best value.

There will always be those home owners that are price shoppers. Many don't understand the difference between price and value.

As for your shop project....

Get bids, including one from the known good contractor. Check to make sure they bid what you spec'd. Ask starting date and completion date (with allowance for inclement weather.

I would not do business with someone that won't give me a firm price. There are certain exceptions like underground obstructions, amount of fill,change orders, etc, but there's no reason a good contractor can't give you a firm price.

This post was edited by Pops1532 at 08:35:24 02/02/14.

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