Hi all,
I’m inclined to think that bidding is inherently unfair. There’s simply no way to accurately forecast the cost of a job, so it will either cost the owner more than it should or the bidder will receive less than his due. Sure, they both agreed on the price but that doesn’t remove the element of unfairness.
Alternatively, the two agree that a certain hourly wage is fair. The owner is presented with all the materials bills and pays exactly that. The two can also make an arrangement for paying insurance and other incidentals. My point here is that there’s a friendlier relationship in this type of contract. What do you think?
Marc
Replies
That sound you hear is a can of worms being opened.
With hourly work, how does the owner know in advance if s/he can afford the project? Sure, maybe the builder can provide an estimate, but then if so why not do the job for the estimate, subject to adjustments for changes made during the work?
Many jobs are easy to put a price to, one that's fair for both parties. I try to do my jobs fixed price whenever possible. The longer and more complicated, the less likely I am to give a fixed price, but it's my preferred method.
"With hourly work, how does the owner know in advance if s/he can afford the project?"Exactly, and this is why I asked the labour/materials rule of thumb question in another thread. I've always used the 60/40 rule when negotiating with clients and it has served me well, but I wanted to hear some other opinions and they bear out my experience. I never bid and I have excellent relationships with all my clients, most of whom have become good friends. My work life is a little nirvana. :)
>>labour/materials rule of thumb
I didn't realize that was your topic. I read the first few posts but honestly I think it's nuts to even try to develop a rule like that. I could go back thru a year or two worth of work in my books and tell you how huge the range is. There isn't a rule of thumb worth using unless you do the same thing over and over.
life's not fair.
life's a gamble.
why should construction be any different.
but ... to your point ...
"There's simply no way to accurately forecast the cost of a job,"
sure there is.
experience.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Part of being a knowledgeable contractor is the ability to price a job accurately. This gives both you and the customer a definite price to work with.
in an hourly situation can you imagine the mess of problems that may arise? The homeonwer feeling that the contractor is taking too long... milking the job. The homeowner disputing the breaks or time to run for material?
Then we deal with the problem facing efficient contractors. If I can finish a job in less time than most of my competitors because I am more skilled, do I deserve less pay?
Are you a contractor or homeowner... or neither?
I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
"Part of being a knowledgeable contractor is the ability to price a job accurately. This gives both you and the customer a definite price to work with."So we have to disagree. With all the variables in construction costs, pricing a job is inaccurate imo, and therefore inherently unfair. However, if you can do it, bravo."in an hourly situation can you imagine the mess of problems that may arise? The homeonwer feeling that the contractor is taking too long... milking the job. The homeowner disputing the breaks or time to run for material?"It's never been an issue in my experience. Not once."Then we deal with the problem facing efficient contractors. If I can finish a job in less time than most of my competitors because I am more skilled, do I deserve less pay?"Of course not."Are you a contractor or homeowner... or neither?"I'm both. Are you neither?
I've been a contractor, self-employed, for the past 21 years.
imo, if you cannot bid the jobs then you shouldn't be in business.
your question about bidding hourly vs per job sopunds like the kind of questions a true novice would ask. It sounds like you really have no idea on how to bid a job properly so to minimize your risk of loss you want to go the safe route and make it an hourly deal.
If you have customers that go for it then great. However, I do not suspect many would go that way for anything more than some minor handyman services.
Most guys here are contractors, not handymen. The projects we do probably wouldn't be suitable for hourly rates.
I could just imagine a guy here building an entire house and billing by the hour.... LOL that would be the day.
Like Jeff Buck said earlier..... "experience". That is the one word that sums it up best.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
I could just imagine a guy here building an entire house and billing by the hour.... LOL that would be the day.
That day has come and gone. Gamble House, Pasadena."...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
""Most guys here are contractors, not handymen. The projects we do probably wouldn't be suitable for hourly rates.I could just imagine a guy here building an entire house and billing by the hour.... LOL that would be the day.Like Jeff Buck said earlier..... "experience". That is the one word that sums it up best."" Are You serious? Pretty insulting comments there.
Negotiated Fee work is quite common. You need a better imagination !! Been doing this as a licensed contractor damn near as long than you and Jeff combined and I have done probably 60-70 complete custom houses or whole house remodels on Cost + a Fixed fee or Cost + a percentage. I have done more dollar volume in work under that type contract than under a Fixed Price contract. Hmm come to think of it the last commercial project I supered on was done under exactly the same type Cost plus a Fixed Fee contract. (Over 2.5 million worth of work)
Biggest problem with Fixed Fee is getting the lenders (not owners) to accept it.
My own projects ranged from 100k up to what would be close to 1 m. in today's dollars.
Never heard one complaint I couldn't deal with by a little explanation to the owner of the issues involved. Just because you haven't done it or don't like it doesn't make it a "Handyman" deal. The best TRUE CUSTOM builders I know of around here always worked under a cost plus basis of some type.
Estimate the costs involved based on information given, add your fee or percentage and then roll with the punches as the owners and architects hammer out the finished project details.
They can't get your Goat if you don't tell them where it is hidden.
Cost + a Fixed fee or Cost + a percentage
and which of those two are hourly? They both sound like a fixed pricing of some sort. Cost plus a fixed amount.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Both. Only fixed part is either the Fee or the Percentage. Overall job cost is what it is.
They can't get your Goat if you don't tell them where it is hidden.
No, the overall job cost is not what it is. There are many costs that are difficult to accurately quantified on a per-job basis. Insurances, office costs, etc.
You said you are charging cost plus a fixed amount. In essence, you are charging a lump sum or relatveliy fixed sum.
This is not "hourly rates".
So, again, you've completely missed the message. Do you just like to argue with me in particular or do you regularly get so mixed up?
hourly rates or even "cost plus fixed rate" are nice safety nets for contractors that are not completely comfortable with estimating but I still contend that an experienced contractor should know how to bid a lump sum project. Hourly rates make sense for handyman repairs not large projects with the limited exception of very unique projects.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Come back to discuss this after you learn about the various types of contracts. You appear to need to get educated. I might suggest you talk with some of the more experienced people here who have been successful with them or perhaps your lawyer.
As I said in my first post... Pick your poison, the one your client and yourself are most comfortable with. "Cost" includes all hard costs, ie. labor, including burden , material and subs overhead.
"Fee" (whether fixed or %) is an amount added to that. There is no "Fixed Dollar amount for the entire project, there is an estimate. "Fixed Bid" is a given dollar amount for the project. BTW there is also a "Cost (Price) not to Exceed" contract. I don't like to see misinformation about whether one can be successful in using any or all of these contracts put out by people who are ignorant of what they mean and have no real world experience using them. I am completely comfortable bidding fixed bid work. Have done so , working on my project now that is $1.2 million that way.
I prefer Cost + a Fixed Fee however and work hard to get a contract signed in that format. When was the last time you did a $1.2 million contract Pete?
They can't get your Goat if you don't tell them where it is hidden.
Aside from it being none of your business, I have bid and won many substantial and profitable contracts. And guess what... they were always bid as a lump sum.
futhermore, you are apparently the one that does not understand the difference between hourly rates and fixed sums, in whole or in part. you are arguing my position on hourly rates by countering with every option other than hourly rates.
Furthermore, you think I do not understand contracts? you apparently do not even know what a contingency is based upon your previous post.
I think it is you that needs to learn a few things... reading comprehension being at the top of that list. Logical debate being a close follower.
btw, lol, how do you have a 1.2 million dollar contract if it is not a fixed price? LOL
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
""futhermore, you are apparently the one that does not understand the difference between hourly rates and fixed sums, in whole or in part. you are arguing my position on hourly rates by countering with every option other than hourly rates."" HUH? Just what is your position on hourly rates?Cost plus a FIXED FEE uses hourly rates as the basis of the cost.
As does COST PLUS a %.
as does a FIXED SUM. You:"No, the overall job cost is not what it is. There are many costs that are difficult to accurately quantified on a per-job basis. Insurances, office costs, etc.You said you are charging cost plus a fixed amount. In essence, you are charging a lump sum or relatveliy fixed sum.This is not "hourly rates"."' Ok,
1) If you can't quantify actual per job costs of insurance office costs etc. then you should be talking to Gerald Hayes, Mike Smith, or many others here who can teach you how to track your costs accuratly.... not me... but I can teach you how to operate with FIXED FEE contracts and make money.
A requirement though is that you open your ears and listen and be willing to learn.
2)Yes I am charging a "lump sum" for my FEE, not for the job. See the difference?
3) Hourly rates are a job COST.
They can't get your Goat if you don't tell them where it is hidden.
I suppose your confusion comes from your apparent disregard for the OP's position that he thought hourly rates would be a better way to do business.
I expressed my opinion that hourly rates are better suited for handyman and repair work.
you were insulted and thought that everything you do is somehow hourly rates although it is not.
I was wrong about your 1.2 million project not being fixed rate. My apologies. Is this your contract? or are you just working on this job? I now get the impression that you are just working on somebody else's 1.2 million dollar project. If that is the case, I've worked on quite a few substantially larger projects than that... all lump sum too. I have had my own contracts that were well into six figures. These were all lump sum jobs too.
Are you trying to use the clout of someone else's 1.2 million dollar project to lend credibility to your position here?
If you think you can completely quantify incidental costs into every project then you have no idea of which you speak. the expense of being in business exist whether you are on a project or not. if you have 2 months down in the winter (end of year), then how do you quantify that expense into the jobs you've alrady done for the year. I know this may be splitting hairs to some extent but there are many costs that simply cannot be accurately quantified. Then again, you do not understand how contingency works so maybe you really don't know how contracts and expense qwuntification work.
My idea of cost plus fixed rate means that you charge the cost of the project plus a fixed sum of money for yourself or the company, depending on your business structure. Each project, being somewhat unique, has different parameters for what is a cost. A small deck job that you can do yourself might be that the cost is merely permits and materials. A project involving numerous subs and whatnot means that the costs include a multitude of things including materisla, subs, maybe some hourly employees, etc.
Being hired to manage a project is not the same as working for cost plus a pecentage or fixed rate.
I still think that working on a cost plus basis is a safety net for those that are uncomfortable with lumo sum pricing or contract pricing. I also think that cost plus pricing is only limitedly acceptable in private contracts with homeowners. Industry standard for commercial projects or contracts in residential markets where you are sub bidding to the GC is lump sum bidding... with the very rare exception of very unique work.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Pete,
If the OP sets his hourly rate to include his profit and overhead and his wage then he has set an hourly rate.
He has not set a FIXED BID.
Final costs of the job are what they are. "'I was wrong about your 1.2 million project not being fixed rate. My apologies. Is this your contract? or are you just working on this job? I now get the impression that you are just working on somebody else's 1.2 million dollar project. "' My contract , I am GC and hold all financial responsibility to get the job done at the fixed and agreed upon price outside of written change orders.
The previous job of $2.5 million was done under the Fixed Fee Contract by a larger contractor than I for which that contractor was paid a FIXED FEE plus all Costs and I was hired directly by the owner as Site Superintendent, for which I was paid a FIXED FEE, all COSTS and an HOURLY WAGE.
I have worked under others at a Fixed Hourly Rate , have done Fixed Bid and Cost Plus jobs over the past 40 years ""Then again, you do not understand how contingency works so maybe you really don't know how contracts and expense qwuntification work."' LOL.. BTW do you return any unused portion of contingency to the owners?
Just checking to see how you think it is used. If it is really contingency and none come up do you claim it as profit or return it to the owner since it was an unnecessary increase in the contract amount for the work delivered.? ""I still think that working on a cost plus basis is a safety net for those that are uncomfortable with lumo sum pricing or contract pricing. I also think that cost plus pricing is only limitedly acceptable in private contracts with homeowners. Industry standard for commercial projects or contracts in residential markets where you are sub bidding to the GC is lump sum bidding... with the very rare exception of very unique work."' You are entitled to that opinion and You already made your opinion clear. Problem is it is just your opinion and has no relevant basis in fact. ""Are you a contractor or homeowner... or neither?"" "" 117073.11 in reply to 117073.9 I've been a contractor, self-employed, for the past 21 years.imo, if you cannot bid the jobs then you shouldn't be in business.your question about bidding hourly vs per job sopunds like the kind of questions a true novice would ask. It sounds like you really have no idea on how to bid a job properly so to minimize your risk of loss you want to go the safe route and make it an hourly deal.If you have customers that go for it then great. However, I do not suspect many would go that way for anything more than some minor handyman services.Most guys here are contractors, not handymen. The projects we do probably wouldn't be suitable for hourly rates.I could just imagine a guy here building an entire house and billing by the hour.... LOL that would be the day.Like Jeff Buck said earlier..... "experience". That is the one word that sums it up best."' I suggest you go back and read the first 20 posts. Read the tone of those who posted and their attitude toward the OP. What the OP says he believes is workable is in fact workable, and isn't done because He , or I , or Mike Smith (when he has done it) don't know what we are about or because we do "Handymans" jobs or because we lack knowledge. PS. Would love to see pictures of you $million plus completed jobs. I am not saying that there is anything wrong with FIXED SUM contracts, I am saying there is also nothing wrong with COST PLUS contracts, and deriding an individual who chooses to use them when both he and his client prefer them is questionable. Edit for some of the typos
Edited 2/24/2009 3:09 pm by dovetail97128
you keep mincing words about your 1.2 million dollar contract so I get the feeling it is not a job you sold for 1.2 million but something that you have a part in as an employee or hired sub or something along those lines.
A contingency is not something that is charged as part of the original contract. it is an amount budgeted to cover additional unforseen expenses. If no unforseen expenses arise then none of the contingency budget is spent. There is nothing to refund. A contingency is usually set as a percentage of the original contract amount and is used as a way to facilitae the smooth operation of a job by avoiding the need to stop for change orders everytime an extra arises.
With regard to lump sum contracts you said:
You are entitled to that opinion and You already made your opinion clear. Problem is it is just your opinion and has no relevant basis in fact.
You are dead wrong and my opinion is absolutley rooted in fact. If you had even a fraction of the experience you claim to have with bidding then you would know that almost every single job in the commercial field requires a lump sum bid. Look at government bid requests for construction projects... almost all if not all require a lump sum bid. The vast majority of all bidding in construction is done as a lump sum bid. You could do a quick survey of the guys here to get a quick assessment of whicih is the most prevalent contract arrangement.... no doubt it would be lump sum.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
pete... check this out....
http://forums.taunton.com/tp-breaktime/messages?msg=106306.1Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Thank You Mike.. ""Has me plenty nervous."'And indeed it did.
First time with ICF, for myself and most of my subs.
First time using the ICF sub.
First time using the framing sub.
First time with a bank that was under scrutiny from the feds. (Still the case)
First time doing a 2 hour fire rated assembly ceiling.
First time doing attic room trusses with a 53' span.
First time being responsible to DEQ over winery waste process water disposal.
Architect was hired on an "as need basis", not to complete an entire set of drawings. Lots of potential for problems there IMO when I posted that.. Contingency set at 4.8%, To date I have used approximately 1/2 of that for unexpected earth work problems, ( boulders), having to raise the building because of amateur site survey errors in regards to the septic elevations and needing to increase the lower truss chord depth (incomplete engineering at time of signing of contract) and paying for extra crane time to set trusses due to weather conditions.
Balance is being doled out as we make progress to buy improvements with the owners making the decisions.
As of this months billings I am almost right on the button in my expected costs and at this point foresee no extra charges to the owner beyond the changes they have come up with in electrical and plumbing.
They can't get your Goat if you don't tell them where it is hidden.
Personally I agree ( I am also in a definite minority here at BT)
I call bidding a poker game, both sides trying to win.
I have done far and away the majority of my work over the last 40 years under some version of T+M.
I generally use Cost plus a Fixed Fee.
I avoid Cost + a Percentage as it leads to suspicions on the part of the owner IMO.
The only reason I am not doing the 1.2 mil. job I am doing now under Cost plus a fixed fee is that the lender insisted upon a Fixed Price Contract.
PS:.
Being a "knowledgeable contractor" does not preclude doing jobs of any size or complexity under T+M or Cost Plus a Fixed Fee, Cost Plus a Percentage or Fixed Price contract.
Pick your poison , they all work just fine.
"cost plus a fixed fee" has a lot of problems also
if you anticipate that your fee will be based on two months of overhead and the project takes 3 months.. how do you make up the loss of revenue?
it still comes down to accurately estimating your project costs and duration
( time is money )..... if you can do that so your cost + fixed fee is accurate... then you can also bid a "lump sum" contract
and lump sum contracts can include Allowances for the unknown "owner-selected" items
we've worked T&M......Cost Plus Fixed Fee..... and Lump Sum.... both my customers and I prefer the Lump SumMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
After thirty years in the biz, I've concluded that t&m is the way to go. I worked fixed price, won some and lost some, for many years and never liked the inherent unfairness of it. I've been t&m only for about ten years now, I have a long list of happy clients, and all my work is custom.Of course the client wants to know how much the project will cost. My experience allows me to ballpark it within 5% plus or minus, and with t&m my client knows he'll get exactly the right deal. I don't want to be immodest but obviously, I'm not a slacker and my building and problem-solving skills are excellent and my reputation reflects that. So t&m works well for me.
Of course the client wants to know how much the project will cost. My experience allows me to ballpark it within 5%
Wow - your powers of foresight are nothing short of miraculous!
I don't want to be immodest but obviously, I'm not a slacker and my building and problem-solving skills are excellent and my reputation reflects that. So t&m works well for me.
Stunning powers of foresight, 'no slacker' extaordinary building and problem-solving skills, sterling reputation based on a long list of happy customers, not to mention inherent modesty - hard to imagine why bidding work would have been a problem, but if T&M works better in your market, then I say go for it!"...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
I ran work for a guy who did almost all of his jobs t&m. We had about five at once, all 600K plus. His selling point was that the client was never ready and that so many allowances were required, it was easier in the long run to do t&m.He also figured less mark up on the t&m, figuring more office work was involved in pricing and administering change orders on a fixed fee job.He was a pretty smart guy, so I am sure he is right.John
marc
if you can ballpark within 5% why not hard bid it?
Scrapr, Invert the question... Why "hard bid" it ?
What is the benifit ?
They can't get your Goat if you don't tell them where it is hidden.
as you have run into the banks like hard bids. Golden Rule applies.
He who has the gold makes the rules. ;-)
everyone knows the parameters. Scope of work clearly defined. Allowance on unknowns.
I think clients are more comfortable with hard bids. Obviously there are clients that either cannot make decisions or are trying to squeeze the last 5% out of the job costs. Sometimes they can win. Some jobs it is better.
Your commercial jobs are probably one of them. But, the sophistication level you are dealing with is much higher than is typical. Full set of plans by an Archy. Everyone knows parameters because it is set out in writing. Even the larger homes probably work good on cost plus a %.
I think in the smaller K&B remodel world a client that is looking for cost plus is looking to save costs on the back of the GC
Many clients are more comfortable with hard bids, but not all. That is true, but that has nothing to do with the tone of the comments coming from the peanut gallery here concerning why do which. I suspect most who bid Fixed Bid are secretly hoping to keep the majority of their "Contingency " amount and make it a part of the overall profit but won't admit to such a thing.If not then why not return the unused contingency to the owner?
It was placed in the contract to be used for unforeseen occurrences, not to benefit the contractor as hidden profit.
They can't get your Goat if you don't tell them where it is hidden.
>> still comes down to accurately estimating your project costs and duration
It doesn't really have much to do with estimating costs. It has a LOT to do with estimating the duration, which I do conservatively. In my business there really isn't much overhead that varies as a percentage of total costs. Insurance and business tax are the easy ones to name.
Mike, You make some good points. "'if you anticipate that your fee will be based on two months of overhead and the project takes 3 months.. how do you make up the loss of revenue?"" The same way you do with a Fixed Price contract that takes you longer than you anticipate( in other words I eat it), except I make hourly rate for the time that spent over the estimated amount. How do you make that hourly rate back ? ""it still comes down to accurately estimating your project costs and duration "" I agree ""then you can also bid a "lump sum" contract..."" I can and have, I just prefer to use the Cost Plus a Fixed fee contract. ""and lump sum contracts can include Allowances for the unknown "owner-selected" items"" As can a Fixed Fee contract. An allowance is nothing more than an estimate and it is certainly not a FIXED Price. ""we've worked T&M......Cost Plus Fixed Fee..... and Lump Sum.... both my customers and I prefer the Lump Sum"' As have I , and once explained my customers and myself prefer Fixed fee contracts.
Nothing wrong with either one, again, "Pick Your Poison" Certainly engaging in a Fixed Fee or Cost Plus contract does not make one either "inexperienced", a "handyman" or any other label with negative connotations.
If it did You would be among the "handyman" and "inexperienced" group by your own admission.
I hardly think that is the case from the work of yours I have seen. Those are ego driven comments and reveal far more about the poster's ignorance in successfully using the different style contracts than it does about the individual with the knowledge and experience to find what suits them and their clients.
They can't get your Goat if you don't tell them where it is hidden.
Certainly engaging in a Fixed Fee or Cost Plus contract does not make one either "inexperienced", a "handyman" or any other label with negative connotations. If it did You would be among the "handyman" and "inexperienced" group by your own admission.I hardly think that is the case from the work of yours I have seen.
Those are ego driven comments and reveal far more about the poster's ignorance in successfully using the different style contracts than it does about the individual with the knowledge and experience to find what suits them and their clients.
No, your perception implies insecrity about yourself. The comment was made that HOURLY work is more suited for handyman or repair work.
man up.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Have it your way. Reading comprehension? I said I am currently working on a $1.2 million FIXED BID CONTRACT. Last job I supered was a $2.5 million NEGOTIATED (Fixed) FEE CONTRACT
Owners paid all costs associated with the job, My employer was paid a FIXED FEE for managing the job. FEE was determined at the start of the job, costs were totally irrelevant to the FEE after that . If you think "Hourly Rate" is for "HANDYMAN" work I can't help you with your perception problems. Be happy to hold a stool for you though when you need to get down off that horse.
They can't get your Goat if you don't tell them where it is hidden.
dove....
<<<<
Certainly engaging in a Fixed Fee or Cost Plus contract does not make one either "inexperienced", a "handyman" or any other label with negative connotations. If it did You would be among the "handyman" and "inexperienced" group by your own admission.I hardly think that is the case from the work of yours I have seen.
Those are ego driven comments and reveal far more about the poster's ignorance in successfully using the different style contracts than it does about the individual with the knowledge and experience to find what suits them and their clients.>>>>
i never implied nor stated the above.... i was just trying to figure out why, since you obviously have good estimates, you preferred C+FF to LS bids
I still do not like the additional burden that C+FF puts on me.... I not only have to sell the job , I continually have to run interference with the customer ... it's like every day we start over.... " ahem.... why am i being charged for this ?..... why was your man not here until 9 am but i got charged for 8 hours........ why do i have to pay twice to install that damaged door ?......
if I ever do C+FF again it will be a C+ (time) x FEE...
but really , my nature and way of doing business works a lot better with LS and ALLOWANCES for the unknowns.Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Mike,
Sorry , I wasn't referring to you as the voice behind those comments.
I don't think you hold that opinion. I prefer my type of contract because I see it as providing the most flexibility with the least aggravation. I don't have to track cost increases, change orders ( either + or -)
No written change orders, just turn in the job costs and get paid.
I have little risk in return for a known gain. As I see it I am the 'Surrogate Mother " of the birth of the building.
It is the clients dream wedded to the designers vision. I just carry it to term.
I don't want to justify why I need a change order every time one of the two has a new idea or revelation. Nor to have to justify why or how I spent contingency moneys. Nor explain that the excess materials present on the site do not belong to the owners. The way I do it all that is covered. I am happy to know exactly what my "Profit" (Fee) will be going in, no need to worry about it after I start, don't have to shop for bargains, or worry about cost increases that will reduce my fee as the job progresses.
I guess the bottom line is I never liked to focus on the "Potential Profit" aspect of the project , I want to focus on the project.
I have never had a project that ran wildly beyond my estimated time line,and even if it did I still earn my hourly rate as part of the costs.
They can't get your Goat if you don't tell them where it is hidden.
Mike
Looking at the time sequence of the posts I would say that, nobody has much work to do today.
Oh right, we're doing office work today. LOL
Rich
Actually had concrete poured on the site today, not much , just for trench drains. Electricians and plumbers, carps all working, me, I am doing the months billings and trading e-mails with archy over exterior details.
They can't get your Goat if you don't tell them where it is hidden.
Dovetail
We actually did a started a roof. Temps got to 50 today and tomorrow. Then back to winter on Thursday.
This lady called in late Oct with a 1/3 of her north roof blown off.
It was late in the year, but we got the north side done with insurance paying for it. We did the tear off without tools.
I told her the roof was poorly installed and the rest of the roof was going to give her trouble.
2 weeks ago we had sustained 50 mph winds, and 1/2 of the south side blew off. Today was the 1st weather we have had that was decent enough to shingle.
Other work is starting to come in now too.
Much of this thread is too much for me to read. You do what works for you and your customers and you always keep an eye out the improve your bottom line. And don't worry about what the other guy is doing.
Oh, the roof is a Bid job.
Have a good day tomorrow.
Rich
""Much of this thread is too much for me to read."' Me too. ;-) Be hoping for good weather for you.
They can't get your Goat if you don't tell them where it is hidden.
You again.
General Contracting 101, Class #2
Bid Job - GC assumes all the risk in the defined Scope of Work, but reaps the benefits, if things go well. GC can turn down future work if relationship isn't working out.
GC controls the job. Change Orders are submitted with additional costs stated. GC controls the funds. GC's business plan (Yes, he better have one) remains intact. GC has incentive to finish faster - shorter duration, more profit.
Time and Materials - Client/ Home Owner assumes all the risk in the defined Scope of Work AND ANY ADDITIONAL WORK, but reaps the savings, if things go well. Client controls funds and therefore job. No Change Orders. No additional cost assessments to define project status. No GC incentive to finish early. GC gets paid for time rather than production. Tool purchases create ownership/ who's budget issues.
If a GC enters into a job with terms as you describe, he/ she becomes partners with the Client. Forget profit. Forget paid vacation. Forget maintaining any long term sanity. The Client, in tracking GC's hours, will also track GC's efficiency. Days GC is not working as fast or well as the previous week it will be reflected in GC's pay. BUT, on the days where the stars are aligned and things go very smoothly and GC comes up with a genius solution - straight time, no bonus.
Typical Client comments when project is T&M:
Wow. That trip to the (supplier) took longer than usual. Are you working on another project?
Moving a bit slower today aren't we (GC).
Looks like you're throwing away more sheetrock/ 2x's/ screws/ tiles...etc than you're using.
I'm not paying for - your errors/ you doing something twice/ related materials.
You said this project would cost $####. Now we are at $#### + $XX. I'm not going to pay for any more time and I expect you to finish.
T$M can work for small projects or where GC and Client have an established relationship.
As for: "There's simply no way to accurately forecast the cost of a job", yes there is. It's called GC experience and Client trust.
Hope this helps.
Kumbahya...
Frankie
Flay your Suffolk bought-this-morning sole with organic hand-cracked pepper and blasted salt.
Thrill each side for four minutes at torchmark haut. Interrogate a lemon.
Embarrass any tough roots from the samphire. Then bamboozle till it's al dente with that certain je ne sais quoi.
Arabella Weir as Minty Marchmont - Posh Nosh
Hi you again,All those things you mention I have never experienced. I guess some people might suffer them...
Frankie
Kumbahya...
Looks like you get a S in "Plays Well with Others" category.
"I wish I could buy the world a coke and keep it company..."
Just having fun. LOL
You have a good day too.
( for the rest of you, you'll have to read yesterday's thread to understand Kumbahya)
Rich
I'm inclined to think that bidding is inherently unfair. Yes, I think so too. We shouldn't have to do it. Mechanics don't, not when there are a lot of unknowns. Doctors don't. Lawyers don't.
There's simply no way to accurately forecast the cost of a job, True.
so it will either cost the owner more than it should Don't agree there, no way.
or the bidder will receive less than his due. Well, now if that isn't a new thought! (excuse the sarcasm, just joking)
Sure, they both agreed on the price but that doesn't remove the element of unfairness. Yeah, life's that way.
Alternatively, the two agree that a certain hourly wage is fair. Usually never happens. Because the h.o. will have a hard time figuring out why "fair" has to include tools, truck, insurance, accountant, licensing fees, bonding, advertising, down time, cell phone or business phone bill, etc, etc. All necessary for a business to stay in business, but not usually understood or accepted by the public in general.
The owner is presented with all the materials bills and pays exactly that. What, no mark-up? And if the costs are in the thousands or tens of thousands (not hard to do, even on a small remodel), what about finance charges? "Sure, you can use 5 thousand dollars of my money to put into your house, no, no charge, just reimburse me, and all is good. Consider it an interest free loan from a good friend!" And if the materials are defective, then who takes care of fixing the problem? Oh, that will be billed t&m? Doesn't seem likely.
The two can also make an arrangement for paying insurance and other incidentals. What kind of arrangement might that be? Insurance and other incidentals, depending on what that includes, can sometimes be half the job cost, and must be borne by the client, one way or another. That's a pretty hard sell right there. Easier just to give 'em a price, and pay out of income from the job.
My point here is that there's a friendlier relationship in this type of contract. What do you think? Its been debated here in the past. T&M, cost plus, bid price, construction management fee. That friendly relationship can be elusive. Sometimes marriage isn't even a friendly relationship, and usually its between two people in love. Business relationships can be somewhat harder to keep friendly. But those friendly relationship jobs are great when you can get 'em.
I personally think firm, detailed bid is the best route. Include a contingency percentage (I usually factor in 15%) for smaller unforeseen occurances, and big ones are an extra, which should be noted in the contract wording (i.e., "does not include any work not specifically listed, nor any work necessitated by conditions unknown at the time of bidding").
"...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
Edited 2/24/2009 3:04 am by Huck
Do you refund any unused portion of the 15% contingency ?
They can't get your Goat if you don't tell them where it is hidden.
Do you refund any unused portion of the 15% contingency?
I'm guessing you're being funny (I didn't see a smiling face), sarcastic, or maybe just ignorant of remodeling/renovation work.
It goes into the job, one way or another.
A few typical examples. all from one recent room addition: Client wants "beverage cooler" instead of undercounter refrigerator, as bid. There is an upcharge, it comes out of the contingency money. Client wants an electrical outlet moved from where the plans show it - after the walls have been sheetrocked and painted. The cost to move it comes out of the contingency money. Architect omitted a structural beam in a key location - I supply the beam and labor to install it from the contingency money.
The client wants a hose bib added that wasn't on the plans, an attic access door that wasn't on the plans, an exterior outlet or two that wasn't on the plans, you know the drill. Plans show 3-0, 8-0 front door supplied by client - but client changes it to 3-0, 6-8 front door. Rough opening gets re-framed accordingly, and (client-supplied) glass block is installed over the door, paid for from you-know-what.
Then there's the stuff the client didn't request, but got anyway - the interior trim gets pocket screw joinery, client didn't even know about it - an upgrade over the existing house, that wasn't on the plans. Client gets an emergency shutoff valve for the plumbing to the addition that wasn't on the plans. Client gets site-built custom gable vents that weren't shown on the plans, because it looks better. Client gets an invisible steel-brace supported "floating" barrier-free countertop for handicap access instead of the less expensive panel-at-one-end which the architect drew, but which restricted access.
Now, client wants tile wainscot around the entire bathoom - that's an extra he'll have to pay for. Client wants a concrete walkway poured that wasn't on the plans - thats an extra he'll have to pay for. Client wants a patio cover built from 4x8's, thats an extra he'll have to pay for."...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
No smiley face. I was serious with my question. Most of those circumstances are change orders,and billable as such IMO.
Contingency to me is when I contract to do a job under a Fixed Amount Contract and run into unforeseen events or misbids on my part (recognizing I am not perfect and make mistakes on my bids). Maybe I underestimated the costs of fees and permits for instance.
Contingency is a cover my own #### amount, or in some cases ( you alluded to them ) where I decide to make a change to improve the quality of the job.
Or perhaps a code mandated change that I was unaware of because I didn't keep up with the latest codes.
It is not to pay for customers changes to the scope of work, I can use it to do that if I wish to gain good will but it isn't the purpose of it IMO. Be interesting to hear others weigh in on the purpose of "Contingency Money"
They can't get your Goat if you don't tell them where it is hidden.
Most of those circumstances are change orders,and billable as such IMO
They are. But I go into each project with the knowledge that the h.o. is largely ignorant of the logistics of the process, so they will make decisions that impact the bottom line in ways they couldn't possibly foresee. And the project itself will throw curves that couldn't be known until one is in the thick of the battle. This happens on every single project, without fail.
Maybe you didn't like my list, but I could expand it ad infinitum. Access problems (homeowner doesnt' want workers in the house while he's away all day), decision delays (h.o. can't make up his mind on a key decision), defects (even minor ones can have an impact - i.e., slab off 1/8", wall out of plumb an eighth or quarter inch) in the original structure that weren't visible until the layers came off, lumber company that bid the job goes under in mid-job, etc., etc.
In remodeling work there are an unlimited number of unforeseen ways that job costs can rise over the initial bid amount. Which is why I said, your original question had to be a joke, sarcasm, or ignorance. You say no joke, so I'm assuming a combination of the other two.
A lot of this stuff is small enough that a contingency percentage will cover the cost, and the project can continue without delay, and within the budget dictated by my contract. I could remove the contingency percentage, lower my bid, then stop the job while I run to them with a change order for every little minor change or contingency that arises - and over the course of the job rack up a bill that equals the contingency $ I otherwise would have factored in, while they end up paying over and above the budget they thought would pay for the job.
"...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
Or you could give them an accurate as possible estimate and then work for a Fixed Fee Contract where they pay the ACTUAL COSTS and don't pay you for some contingency that never occurs. Just a different methodology. You guesstimate a percentage (15%) of unforeseen costs and keep the money if they don't occur, I have the client pay only for what occurs. Neither is right or wrong,just different is all.
They can't get your Goat if you don't tell them where it is hidden.
You guesstimate a percentage (15%) of unforeseen costs and keep the money if they don't occur, I have the client pay only for what occurs.
Wow, you have jobs that have no contingencies occur. That's great. Obviously the jobs you do are not even remotely similar to the jobs I do (remodeling, renovation, room additions) where contingencies occur on every job. So why are you arguing apples to oranges? "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
""Wow, you have jobs that have no contingencies occur. That's great. Obviously the jobs you do are not even remotely similar to the jobs I do (remodeling, renovation, room additions) where contingencies occur on every job. So why are you arguing apples to oranges? "' I didn't say that. I was making the point that every cost on the job is already covered under the COST part of the COST + a FIXED FEE job. You don't have that luxury so you guesstimate what it will cost.Of course contingencies occur. You have to set up an estimated $ amount for them , under my preferred method I do not.
I really am curios about those jobs that the "contingency" isn't enough to cover those unexpected costs and also those in which the unexpected costs don't come close to the estimated amount. Do you write a change order once you have spent the contingency ?
Do you have to justify how it was spent? Do you rebate when it isn't spent or do you keep it and in a sense punish one owner because the next one's job might have more "contingency" costs involved? Not trying to pick on you , just asking how it works with you . I have done my share of remodels and as far as I am concerned no job deserves a Cost Plus more than they do, however I have done them Fixed bid as well.
They can't get your Goat if you don't tell them where it is hidden.
I really am curios about those jobs that the "contingency" isn't enough to cover those unexpected costs and also those in which the unexpected costs don't come close to the estimated amount.
you should read my posts, this was already addressed 117073.25
I suspect most who bid Fixed Bid are secretly hoping to keep the majority of their "Contingency " amount and make it a part of the overall profit but won't admit to such a thing.
You may be on to something there. I suspect there may be quite a few of those unethical types, secretly hoping to make a profit!
in a sense punish one owner because the next one's job might have more "contingency" costs involved?
Not quite sure where this comment is coming from. Does it bother you that the post office charges the same price for a stamp to mail a letter to East Podunk as it does to mail it across the street? Aren't they punishing one mailer because the next one might have more delivery costs?
Isn't it a basic fact of business that the cost of doing business is factored into each job? Should the cost of a yellow pages ad only be factored into those jobs that directly result from that ad? Wow, wouldn't it punishing the people who called me from my craigslist ad if their bill reflected my overhead including my yellow pages ad? Huh?
I was making the point that every cost on the job is already covered under the COST part of the COST + a FIXED FEE job. You don't have that luxury so you guesstimate what it will cost.
I think the OP already said he guesstimates the cost with every T&M job he does, and really, who's going to authorize a T&M job without some guesstimate of cost? - so what is your point?
""Wow, you have jobs that have no contingencies occur... " I didn't say that.
No, you said that on your jobs customers don't pay for contingencies because they don't pay for what didn't occur. So no contingencies occur. That would never be the case in the type of work I do."...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
How about I phrase it this way . I have no need for a contingency fund or % because the entire estimated cost of the job is a contingency fund. I read your post. You gave many examples of situations where the entire amount of contingency was spent. I see most of those items listed as change orders under a fixed bid. I use contingency just as i said, to make sure I am covered if at all possible for my own mistakes of those items that no reasonable person would see. If I understand you correctly you include a contingency amount as part of your bid for fixed amount work, if I understand Pete correctly he has an amount outside of the contract amount as a contingency amount. Two very different methodologies. When operating under a Fixed Fee contract I have no need for a contingency amount. That is different than not having unexpected things come up. Certainly they come up , but the monies payed to deal with them are simply part of the cost of the job to the owner, not some separate account of money.One more time I am not arguing that there is anything at all wrong with Fixed Bid contracts. Only that Fixed Fee, Hourly Rate, T+M , Cost + a % are all are viable alternatives and can be used successfully.
They can't get your Goat if you don't tell them where it is hidden.
I am not arguing that there is anything at all wrong with Fixed Bid contracts. Only that Fixed Fee, Hourly Rate, T+M , Cost + a % are all are viable alternatives and can be used successfully.
I concur."...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
I want to share the experience of the company I work for. They have been doing exclusively Cost + % for about 6 years (I've been there for 1.5 years). Work is additions + remodeling, with average project size over $150k. Bottom line - it works for us. And separate from the economics of it, is the improved nature of the client / contractor relationship. We have not experienced any of the negatives outlined by Pete et al. It demands a trust-based relationship, and I guess we (and our clients) like the 'fairness' of it. Over the last half year we are really focusing on improving estimates and maintaining disciplined clear reporting to the client of actual costs vs estimates. Our primary objective with this effort is improved customer satisfaction, not to move into the 'real contractors' world' of bidding.
I know this has been debated ad nauseum here, but the original post was pertaining to bid price vs. T&M, not cost plus. That said, I think cost plus could be a good way to go, as you say, if the trust is there.
The problem I have with it is that no one here wants to pay the true hourly cost of a licensed contractor. So I give them a bid price, and they don't have to know the hourly cost. Last job I did, the h.o. still got pizzed because he said I made too much money. On a bid job. Where I was the low bidder. Where he signed a contract. Where he raved about the quality of my work. A$$-monkey.
The bootleg or underground economy of unlicensed "contractors" who carry no insurance and pay their help cash under the table is very strong here, and it has undermined the construction/remodeling economy big time. "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
"And separate from the economics of it, is the improved nature of the client/contractor relationship."And that's what clinches it for me. My clients are in effect my partners. We're going after it together. They're engaged, and why not, it's their project! As long as I'm honest and efficient there's none of the suspicion and competition that often creeps into the bid scenario. As I said at the start of this, I think the competitive bid is inherently unfair. But if you're a fixed-price contractor, please don't take this as a disparaging comment. It's just that I know the bid game well and I'm happy that I don't have to play it anymore.
"Over the last half year we are really focusing on improving estimates and maintaining disciplined clear reporting to the client of actual costs vs estimates."
That statement right there demonstrates a certain level of difficulty associated with cost plus contracts. I prefer fixed bids simply because I don't want to spend a year and a half struggling with reports and "better ways to report".
Its evident that neither way is the only "right way" to do business. For some contractors, it's the best way. For others, its the worst way. That same statement can be attributed to the clients. Summed up, in the world of contracting: "...one hat does not fit all!"
Jim, ""That statement right there demonstrates a certain level of difficulty associated with cost plus contracts. I prefer fixed bids simply because I don't want to spend a year and a half struggling with reports and "better ways to report". Perhaps you are reading something into his statement. He stated :
"Over the last half year we are really focusing on improving estimates and maintaining disciplined clear reporting to the client of actual costs vs estimates." Not 1 1/2 years , nor did the word struggle or difficulty appear in the sentence. Now I wouldn't know until he clarifies the statement , but I read his comment as simply a focus of his business plan right now.
Not unlike perhaps a "fixed bid contractor" focusing on better cost tracking and analysis so that he can improve his bidding process. I totally agree with you however that "one hat does not fit all"
They can't get your Goat if you don't tell them where it is hidden.
Responding to messages of Dovetail and Blue on Feb 27:
The effort involved in the analysis and reporting is not trivial, but its not a struggle. It is certainly no more effort than we would invest to stay on top of costs for a bid job. Our motivation is to avoid surprises for us and the client, to provide a more professional service, and to obtain for ourselves the timely feedback to our estimating system.Certainly its not my point to argue that T&M is 'better' than hard bids; I just wanted to share our experience, and to argue against the premise that T&M is for beginners, or small jobs. We have had internal discussions in the company about bidding vs T&M, and in fact will (hopefully) start a bid job in about a month. We'll see how it works out.
Hope you don't mind me asking these questions.Do you collect a percentage of the fixed fee with each progress payment or collect it all at the end?Is your overhead covered in your hourly rate or is that in the fixed fee?If the scope of work changes or the owner selects some unexpected expensive items, do you alter the fixed fee?Thanks, John
No Problem ""Do you collect a percentage of the fixed fee with each progress payment or collect it all at the end?"" I collect 1/2 up front, 1/2 at the end ""Is your overhead covered in your hourly rate or is that in the fixed fee?"" There is my hourly rate, the subs costs, materials cost , overhead costs billed out monthly. My "overhead" is part of the costs of the job. Phone, paper, time doing books,insurance, postage, time talking to archys, engineers etc., Also included is an amount for just keeping my doors open. Fee is just that , a professional fee. "'If the scope of work changes or the owner selects some unexpected expensive items, do you alter the fixed fee?"' Nope. I have never had a job change so much I though it was necessary to do that. Since all I have done at the start is lay out a budget to the best of my ability and am not under any $ constraint to stay with in it I don't care what the owner changes in terms of cost. I don't pay for the materials so cost increases affect the owner not me, I don't pay for changes so again they affect owner not me.
If it takes me more time to solve a problem because of these things then I get paid for more hours but my fee has never changed neither up nor down.
They can't get your Goat if you don't tell them where it is hidden.
Why should a contractor get a mark up on materials? As the property owner's agent he is bound to his principal for the exact cost of the material. Does that mean he works for free? Of course not. If a carpentry contractor agrees to order the labor, materials, and equipment for a carpentry job, then his contract price is his price for such ordering. But he does not get that price plus a mark up. He gets reimbursed only the cost of the labor, materials, and equipment. Personal expenses like an office, computers, secretaries, and so forth should be reflected in his contract price.The statutory law in my state resolves your inquiry about defective materials. Here, a carpentry contractor has to prove the exact cost of his expenses for labor, materials, and equipment. This proof is to be shown by invoices or billings for labor, materials, and equipment from those who supply those things. They are then subject to what is termed 'certification and approval'. The property owner has a fixed amount of time to deny or object to such expenses. If the property owner does not do so then the expenses are deemed by statute to be 'certified and approved'. One of the reasons a property owner can object for is defective materials. It is part of the state test for a carpentry contractor license that you have a knowledge of the materials. Therefore, it is the carpentry contractor's responsibility to see to it that no defective materials are used. For those interested, this is in sections 32-1129.01 - 32-1129.04 of Arizona statute law. While state law requires all contractor's and subcontractor's contracts to be on a cost plus basis, they also refer to bidding for those contracts. So contractors bid against each other for cost plus contracts. This is not contradictory. If one contractor bids 100k and another bids 90k and another bids 20% and another bids 30%, the property owner can choose who he wants to do the work. If the property owner requires a lump sum bid that only means that he does not want cost plus percentage. Now suppose that the property owner hires a general contractor for 90k. Does that mean that the overall cost of the job will be less than the general contractor who bid 100k? They may not use the same subs. The different subs may use different labor, material, and equipment suppliers. The 90k GC may use more expensive subs who use more expensive suppliers.
so.... mordecai... what are you trying to say ?Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
My response addressed Huck's questions concerning defective materials and mark up. If a contractor uses faulty materials, should the property owner pay? My response was that the statutory law where I reside addresses that issue. Huck also raised the issue of mark up. My response was that the contractor is already getting paid for ordering the materials. Why should he get a mark up on top of that price?
i think you're full of it...
<<<<
The statutory law in my state resolves your inquiry about defective materials. Here, a carpentry contractor has to prove the exact cost of his expenses for labor, materials, and equipment. This proof is to be shown by invoices or billings for labor, materials, and equipment from those who supply those things. They are then subject to what is termed 'certification and approval'. The property owner has a fixed amount of time to deny or object to such expenses. If the property owner does not do so then the expenses are deemed by statute to be 'certified and approved'. One of the reasons a property owner can object for is defective materials. It is part of the state test for a carpentry contractor license that you have a knowledge of the materials. Therefore, it is the carpentry contractor's responsibility to see to it that no defective materials are used. For those interested, this is in sections 32-1129.01 - 32-1129.04 of Arizona statute law.
While state law requires all contractor's and subcontractor's contracts to be on a cost plus basis, they also refer to bidding for those contracts. So contractors bid against each other for cost plus contracts. This is not contradictory. If one contractor bids 100k and another bids 90k and another bids 20% and another bids 30%, the property owner can choose who he wants to do the work. If the property owner requires a lump sum bid that only means that he does not want cost plus percentage. Now suppose that the property owner hires a general contractor for 90k. Does that mean that the overall cost of the job will be less than the general contractor who bid 100k? They may not use the same subs. The different subs may use different labor, material, and equipment suppliers. The 90k GC may use more expensive subs who use more expensive suppliers.>>>>
i think you're the same guy that has been wrongly arguing contract law for many years and you really don't have a clue
just changing your screen name to mordecai hardly camouflages your same illogical interpretations of lawMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
why is it always Arizona law ... ?
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Tell me Mr. Smith what this means:Section 32-1129.04, subsection E "A contractor or subcontractor that suspends performance as provided in this section is not required to furnish further labor, materials or services until the contractor or subcontractor is paid the amount that was certified and approved, together with any costs incurred for mobilization resulting from the shutdown or start-up of a project." What is a certified and approved cost? Is labor a cost? Are materials a cost?I also need you to explain this: To obtain a contractor license for plumbing, electrical, carpentry etc., the statute reads "Before a license is issued, the qualifying party shall: Have had a minimum of four years' practical or management trade experience...' Mr. Smith, please define the difference between practical trade experience and management trade experience.Also, one more thing. Under the statutory law here, the qualifying party for a contractor's license must take an examination. Section 32-1127 states: "The terms 'responsible managing employee' and 'qualifying party' shall, for the purposes of administering this chapter, be synonymous.... While engaged as a qualifying party for a licensee, the qualifying party shall not take other employment that would conflict with his duties as qualifying party or conflict with his ability to adequately supervise the work performed by the licensee." Presuming that a contractor would take the licensing exam, then would it not be correct to say that an employee taking the exam is, in fact, a contractor? So an employee is a contractor. Correct?
what would happen in your world if you actually won an argument once?
big prize money?
pick something off the top shelf?
certificate to hang on the wall?
I'm curious how things work there.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
mordecai.... you sure do have fun with this stuffMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
""The terms 'responsible managing employee' and 'qualifying party' shall, for the purposes of administering this chapter, be synonymous.... While engaged as a qualifying party for a licensee, the qualifying party shall not take other employment that would conflict with his duties as qualifying party or conflict with his ability to adequately supervise the work performed by the licensee." Presuming that a contractor would take the licensing exam, then would it not be correct to say that an employee taking the exam is, in fact, a contractor? So an employee is a contractor. Correct?"
You need to do some reading about faulty syllogisms.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
He just pulled some statements without the whole. How could anyone answer that question.
Excuse me. I should have stated that an employee could be a contractor. The language I used apparently confused you. I meant that when a contractor who is an employee takes the licensing exam then an employee is a contractor. If someone other than an employee takes the exam then the contractor is not an employee.
"I meant that when a contractor who is an employee takes the licensing exam then an employee is a contractor."
That's a gem right there.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I'm a tiny bit confused by that logic. Am I alone in that ?
If you're confused, you must be a contractor because contractors are confused. (at least in Arizona)
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Walter.
You very easily can be confused.
It isn't because you are dumb, can't read, can't comprehend nor any of the other reasons that can be dreamt up. Because that isn't you.
Must be something else.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Calvin,
Thank you for clearing that up for me <GGG>
Hows your recovery going ? Back to 97.5% or higher ?
Looking forward to Spring now and getting back to steady work again.
Might have some eagle pics for " on the way " soon. Doing a big slate and copper job for a CV surgeon near the Penobscot River where they're seen quite often.
Walter
I'm thinking I'm about 105% man.
That is a conclusion based on the results of some serious putting this past sunday.
1-2 putted every single green.
See, that surgery can tighten up a game.
Info still out on the drives, fairway shots and chips.
And I'll be waiting for the eagle. Flys on Friday I think.
I'll get some perched Coopers Hawk up there when you do.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Hasn't been flying often enough these last few months !
So you judge your fitness by your golf game not your working abilities ?
Shoot yeah, anyone can work.
Just so happens I got the work thing going on too, just didn't want to make some of the guys feel bad. You know-old guy, infirm.........still getting calls and producing. Not good for morale.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
They should be happy for you -- not jealous.
Maybe jealous of your golf scores though !
The scores will come. I now need to keep the drives in the fairway (pretty good so far), the fairway shots true and where they belong, and damn those chips...........they truly need work.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Slateman
We have had several pair wintering in our area. 20 mile north of us I have seen as many as 3 together at one time.
Used to be quite an event if you saw an eagle in IA.
Last couple of years you will see one almost daily near the Floyd River.
The Floyd river is not much of a river though, more like a big creek. In the summer you can walk across and not get your knees wet.
West Lake Okoboji (IA's most developed and busiest lake) had a nesting pair and and hatchling. Everybody had to drive by with their boats and get a look. Didn't seem to bother the eagles one bit.
Rich
Rich
I think Mrducci is really 5965.
It was 5150 (I remember because of the Van Halen album).Before that it was Robert Haugen.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I know a can of worms is being opened, but who is this guy?
jon blakemore got it right
basically he's a guy who thinks his interpretation of AZ contract law is the correct one
he has lots of strange ideas about employees, employers, homeowners, tradesmen... you name it...
he'll find some obscure citation in law and go " see? that proves it ! "
every once i a while he comes back with a new screen name and starts over from a different tackMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
every once i a while he comes back with a new screen name and starts over from a different tack
Maybe someone should mention to him that we don't care!
Err...forget it...we don't want to ruin his day.
retired engineers need something to do ...
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
I'm inclined to think that bidding is inherently unfair.
If several qualified contractors submit bids, how can it be unfair to anyone?
Well, in theory that would be better for everyone, I have a few clients that I do that with. They get what they want done, I don't waste my time banging together numbers, which I always add extra just incase. It's kind of hard to tell someone that the job will take an extra week, when you originally had said 3 weeks. It also has a potential to get nasty, ie, your breaks are too long, ect.
In a perfect world,yes.
difficult in this one
Someone here said one time:
"Here is my estimate. Oh, you want a firm price? Just double my estimate."
T & M - I do this for many of my clients. It just depends on the job.
I had to quote one for insurance reasons. Hope I put enough in to it. I will finish it this spring when the weather improves. Only outside work left.
Bryan"Objects in mirror appear closer than they are."
Klakamp Construction, Findlay, Ohio - just south of the Glass City
Marc,
Bidding is won or lost on salesmanship.
L
GardenStructure.com~Build for the Art of it! Decks Blog
As others have said, the owner will want to know if the projects affordable. When I give an hourly quote, ultimitlythe question arises "So, how many hours will it take then?" which is the same a lump sum.
Runnerguy
Our jobs are large and complex residential projects. The last one we bid had 18 change orders generated before we broke ground, each of which would have to be tracked separately. Fortunately we talked them into switching to T+M. Now we almost always work T+M--it's fair to everyone, and makes the client a part of the team. THEY have control over their own budget, with plenty of help from us of course.
I've found that someone like a lawyer will be receptive to hourly. Its the way they bill, they can relate.
The general public just wants to know how much.
The trouble with paying hourly is there is no reward for efficency and speed..
The trouble with Bidding is there is no room for the unforseen.
...and the trouble with tribbles is... aw, never mind."...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
The reward for efficiency and speed is that when you're done the client has extra money in their pocket or to spend on details that make them happy. Happy clients lead to more happy clients.
Come on Mike, can't be true, will never work, who in their right mind would believe that?A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
I know, I know. The only way to make money in this business is to take every client for all you can.
The only way to make money in this business is to take every client for all you can.
I know you are just kidding but I'm not convicnced anyone would make any money even if they did take the clients for all that they could.
Blue, a little depressed today?
Not really depressed...I was just making an observation.
OK, just noticed a tinge!
We've never met, yet you read me like a book.
Maybe this coming Fest waaaaaaaaaaaaaaaay over on the other side?A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
I don't know Calvin, I would really like to but can't commit right now--too many balls in the air. Have to keep those customers happy and can't afford a vacation anyway....
;-)
I hear you Mike. I know the same scenario, but.
Jim and Kathy were gracious in coming and helping us out here at our fest and I'm throwing my qtrs in a jar towards this fiasco (no really an apt description) instead of using them for some camera gear as is the norm, because we sure do want to visit, help out and probably will need some break from the horrible #### we be in.
And what the hell, it has to help the economy...........
If by chance you don't go, but do go to Cleveland to visit-please let us know. What's a couple hours for some discourse.
Feels good to hear the phone ring about work.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
I met Jim a couple years ago (same trip where Luka was accused of eating me) and was quite excited when he offered to host a fest. I've never been to one, good intentions aside, and I know I'd have a great time because all the Breaktimers I've met have been great people.
But, DW's cousin is coming home to Santa Fe this fall after four years in Indonesia, my best friend from high school has been in Japan for ten years, and my best friend from college has been in France for ten years.... We haven't been to visit any of them. So our meager travel budget is being pulled in several directions, but if we can swing it we'll be there.
When we get back to Ohio we'll definitely catch up with you though! LOL, DW's on the phone right now with her sister in Athens, OH.
Lemme know if you decide to enter our borders.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
I wish all clients were fair minded and reasonable..
Some would be if they really understood but it's too complicated for them to grasp ina few minutes so they lose interest and do 2nd grade math.. this is cheaper than that so this must be a better deal..
Ahh ... But "Knowledgeable Contractors" know how to avoid those types after just one job with one. Just do everything on a cost plus basis. ;-)
They can't get your Goat if you don't tell them where it is hidden.
this is cheaper than that so this must be a better deal..
I LOVE following a guy who has done cheap but shoddy work. "Expensive but worth it" is not a bad reputation to have. Look at Hazlett.
You assume that everybody is willing (and able) to pay for good work.. plus recognize it when they see it..
What do you base that assumption on?
You assume that I assume that. I never said that.
You see I assume that you assumed that because your posts seemed to imply that <grin>
I notice most customers like the idea of knowing, up front, what they are going to pay. The exception are the people who want to pay me twenty an hour. They, generally, seem to hate the thought of paying even fifty, or seventy an hour. They, darn sure, hate paying one hundred or more an hour.
My buddy kept telling me, you'll never start making money until you learn to bid. I'd forgotten that, until your post. He was right.
Keeping in mind that if you're getting all your bids, you're bidding too low, I only started making money when I began bidding jobs, rather than taking hourly rates.
I need a bumper sticker, for my house, that says, my summer home is a shop full of tools and equipment. That twenty-five an hour job wouldn't have allowed me to have grown and be able to do many jobs. It, at best, represents the same wages someone would earn on a just-get-by job for which, not they, but someone else secured, which is tended out of a shop [or office] someone else pays for, doing work someone else bid...........
In bidding, I figure the hours, through in a couple more, times it by whatever I think I should get, it works out well enough for unlearned types like myself.
Perhaps the main reason t&m is working so well for me now is that most of my business is with repeat clients. They're not looking for anyone else, so I'm not in a competitive environment anymore. New clients come from word of mouth recommendations. I have one ad that runs perpetually in a local publication, I think I've gotten maybe one job from it.
T&M sure takes away a lot of stress.I don't run with the big dogs, a big job, for me, is a 200 k. remodel. Still, I find myself running bids through over and over through my mind for any significant bid, before I plop it on a customer's desk. I also spend a bit of time on formatting the proposition, for impact. If I put my mind to it, I could sell seventy to one hundred an hour jobs. I presume, for those who balk, it would take educating the client on my background costs, including how many bodies they'd get for their nickel, reminding them, if they are expecting to be charged the same twenty-five an hour they get paid, they don't have overhead (e.g., 40 k in tools and equipment, three vehicles, advertising, phone, payroll and withholding, lobbying expense (bidding), shop and utilities, etc.)
have one ad that runs perpetually in a local publication, I think I've gotten maybe one job from
This begs the question, why are you wasting your money on this add?
No, I think it begs the questions: How much did the job make you, how much does the ad cost, and why aren't you running more ads if you now know they bring in work? "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
i never find those ads a waste of money
many of my customers look up my ad in the local paper because they know it's there... saves them time with the phone book
also.. they see the ad and it reminds them they were supposed to call by about some work they wanted done
remember.... the average person needs 7 "hits" before they remember you...
so 7 hits might be
2 seeing one of our trucks around town
2 seeing job signs
1 seeing our work trailer
1 seeing our business card in the rack at the local hardware store
and
1 seeing our ad in the local paper
now they remember usMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Good point, only problem is this person was moaning that he only had one job from it, which begs the question as I asked why bother spending the money.
By the way, Mike, I agree with you, you need to reinforce in prospects mind that you are a substantial company that will do as promised, with the fewest hasels. Money doesn't even enter into the equation. I reflect back on the work that my wife and I have had done on our house. We always went with the com. or person that we felt comfortable with!!
In fact I have gone with the high bidder, because of comfort level with the companies representative.
Mike
What blows me away is when you look at a job and the HO tells me how hard it is to find a contractor, and suddenly they thought of giving me a call.
This is from people I have know for a long time.
I think people just forget about you. Running a small ad all the time keeps your name out in front of people.
Rich
I ask myself that every time the bill comes in, but I'm not moaning about it, it's just a statement of fact. I never moan, except sometimes in bed, or when the weather's bad, or I'm stuck behind a slowpoke, or a tool breaks, or when I write a cheque, or hit my thumb again, or think about the world, or look at my portfolio, or see my ex, or have to cook, or have to get up in the morning, or when I rip my pants again, or the cord gets stuck, or the frisbee flies over the fence again, or when someone doesn't see it my way. Other than that, I never moan.
Years ago I did predominantly roofing. all bids. I would make a killing on some jobs but that only made up for the dogs. and there were a lot of dogs because the competition was tough. we would do a job for cost if it meant securing a bigger market share.
now I do most of my work (95% ?) T&M or cost plus. it works out well for me. I mark up EVERYTHING 15%. that little mark-up is substantial at the end of the year
once I get the go ahead to start work I am on their dime for everything from permitting to fetching materials and clean up. if someone wants to save a few dollars they can do some of the clean-up or run to the store for me. those are things I dont like to do anyway
also, on an hourly basis I get a lot of extra work. it gives the customer peace of mind knowing that they can get that list of unfinished projects completed without having to squabble over prices for every little thing.
there are no gaps in my appointment book. I dont need to make a killing on some jobs, I just need to stay busy. slow and steady wins the race
I can't argue with success. If you say your way is succeeding for you, I believe it. That assumption is fortified by the good points made by many others here too. But then, the same goes for bidding proponents. As such, it seems my needs would be well served to consider revisiting the T&M approach, having gotten a few years under my belt. It, certainly, could go a long way in filling work gaps.
I for the past four years have worked for a company that does large homes (3 million plus jobs) on a total cost plus basis; and when I say everything I mean everything. I am a subcontractor (finish work) and I turn in my invoice every week which is essentially a time card.
I think what they do to get around the potential problems is to make sure that everything is bullet proof: every meeting has notes, emails are sent daily (and saved), design decisions and changing budgets are recorded as they happen. If you are going to invoice like this, Records are a must.
One time I saw somebody threaten a lawsuit and within one day the lawyer called offering to settle up; I think the lawyer and the client realized that all the records were on the contractors side. Like I said, you can make good money, but you really need to cover yourself. It probably helps that this contractor was a coporate accountant/finance guy before he got into contracting.
"My buddy kept telling me, you'll never start making money until you learn to bid. I'd forgotten that, until your post. He was right."
I have a buddy I tell that to.
I also tell him ... you don't learn how to bid until you start to bid.
it's not really something you learn fully before jumping in feet first.
the longer he puts it off ... the longer it'll be before he gets it right.
he's afraid of losing ... but by charging a low hourly ... 'cause he's afraid ... he's not really risking much. If he started 5 yrs ago he'd already be over the hump.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
t & m doesn't work because the customer still wants an estimate; so you're stuck with the worst of both. Except old two-way trust customers. Still risky.
Prepare to bend over.
not for you
marcjb wrote: "There's simply no way to accurately forecast the cost of a job".
If you can't accurately "forcast" you probably have no business doing the job in the first place Experience tells you what's involved with the work.
Or... be up front with them saying you think it will cost X - y but not 100% certain.Why should the client pay for you to learn the how- to's? Being able to bid a job accurately and being fair to the client is your job as a professional.
""...Experience tells you what's involved with the work. "" Who paid you to gather your years of experience? ""Why should the client pay for you to learn the how- to's?"' Once again, who paid you to learn? Maybe you were born with the silver spoon of years of experience at contracting in your mouth , the rest of the world earns and learns.
They can't get your Goat if you don't tell them where it is hidden.
wait ! hey, over here ... lemme answer that.i learned by doing ..... and over the years i realized that i never overbid them.... i always underbid themso.. the answer is ( for most in the trades ) I paid for the education and i have the tax returns to prove itMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Yea.... But even so you were were paid to learn the lesson... just not as much as you would have liked !! ;-)
They can't get your Goat if you don't tell them where it is hidden.
no... my point is that i paid the homeowner for my education...
they didn't pay me
there were many houses i built in the early days where i would have been better off just giving them a check for $10,000 and gone and done something elsein the end , i paid my tuitioni often think the best deal for a homeowner is to hire some young dude with good carpentry skills and little business knowledge...Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
i paid the homeowner for my education...they didn't pay methere were many houses i built in the early days where i would have been better off just giving them a check for $10,000 and gone and done something else
in the end , i paid my tuition
Misery loves company - why I come here. Thanks for sharing that. I'm always asking: when does the learning end and the earning begin????"...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
reminds me a little personal story... I had a desire to learn more about masonry construction.. brick, block stone. Went to a higly respected local mason i knew from the trades (I was about 35 at the time and already had been a carpenter for 15 years, contracting for maybe 12 years.
Told him I would like to work for him as an apprentice because I wanted to learn his trade. He asked how much tuition was I willing to pay,.... people pay good money going to school to learn things to make a living at , the teachers and professors get paid for teaching, so How much are you willing to pay?. I stuck with carpentry.. couldn't afford the education in masonry.
They can't get your Goat if you don't tell them where it is hidden.
so, how's your masonry skills today ?i would guess that the only things i never got much skill in are electrical & plumbingeverything else i have at least a rudimentary skillsomethings, the boredom factor is the restraintMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Rudimentary at best. I have laid a few small block foundations, repaired others, laid some brick for fireplace/woodstove hearths and alcove walls, played at stone work , but stone is uncommon here so not much call for real stone work. My concrete skills (forming pouring and finishing)are much, much better.
They can't get your Goat if you don't tell them where it is hidden.
i always suspected i have ADD.... especially after i learned how to spell it
i get bored fast and want to move on
i'm a better delegator than a doer
and unusual things attract me more than something we've already doneMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Gotta wonder if that's a similar trait in many remodelers.I know it rings true for me. My favorite parts of a job these days is selling it, getting it going and the last check. Unless there is something unusual or creative to hold my interest.I still love remodeling, maybe it's the years
Barry E-Remodeler
Sounds a lot like ADD.
I finally started a low dosage of meds for mine--really works wonders. You're never to old to try new drugs Mike!
how does 'gansett & golf work for you ?Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
here's what happens when you don't bid the job right
View Image
the owner shut the job down...
View Image
Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Edited 3/27/2009 10:42 pm ET by MikeSmith
Edited 3/27/2009 10:42 pm ET by MikeSmith
He didn't get very far. Must be more to this story.John
lots more.... but it's the same old story..... just retold all the time
mostly another example of trying to live off the cash flow....and when there isn't another one in the wings, the cash flow dries upMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
I never got the hang of chasing that ball around. Guess I could caddy though ;-)
Mike, that's the easy part-the chasing.
It's the making it "go" that's the hard part.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Well if I can't figure out the chasing part, how am I ever going to figure out the propulsion part?
I get a kick out of splitting firewood, that's kind of similar, right?
All hand eye coordination so they tell me.
Exactly like splitting wood.
And with some of my shots ystdy, knowledge of the woods is a real help.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
One day an Irishman, who had been stranded on a deserted island for over 10 years, saw a speck on the horizon. He thought to himself, "It's certainly not a ship." As the speck got closer and closer, he began to rule out even the possibilities of a small boat or a raft. Suddenly there strode from the surf a figure clad in a black wet suit. Putting aside the scuba tanks and mask and zipping down the top of the wet suit stood a drop-dead gorgeous blonde! She walked up to the stunned Irishman and said to him, "Tell me, how long has it been since you've had a good cigar?" "Ten years," replied the amazed Irishman. With that, she reached over and unzipped a waterproof pocket on the left sleeve of her wet suit and pulled out a fresh package of cigars and a lighter. He took a cigar, slowly lit it, and took a long drag. "Faith and begorrah," said the castaway, "that is so good! I'd almost forgotten how great a smoke can be!" "And how long has it been since you've had a drop of good Bushmill's Irish Whiskey?" asked the blonde. Trembling, the castaway replied, "Ten years." Hearing that, the blonde reached over to her right sleeve, unzipped a pocket there and removed a flask and handed it to him. He opened the flask and took a long drink. " 'Tis nectar of the gods!" shouted the Irishman. " 'Tis truly fantastic!!!" At this point the gorgeous blonde started to slowly unzip the long front of her wet suit, right down the middle. She looked at the trembling man and asked, "And how long has it been since you played around?" With tears in his eyes, the Irishman fell to his knees and sobbed, "Jesus, Mary and Joseph! Don't tell me that you've got golf clubs in there too!" Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Is that to be the preface in you and recko's book?
Nicely done.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
LOL
A sport that screws up priorities that badly is probably something I shouldn't dabble in!
That would be a great introduction to a book though--
Mike, have you read this:http://www.carlhiaasen.com/books/books-downhill-lie.htmls'good.http://www.tvwsolar.com
I went down to the lobby
To make a small call out.
A pretty dancing girl was there,
And she began to shout,
"Go on back to see the gypsy.
He can move you from the rear,
Drive you from your fear,
Bring you through the mirror.
He did it in Las Vegas,
And he can do it here."
thanks, i'll look for itMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
I think after you read you'll see there's a story that can be written on just about everything.
Of course the talent to write is the real key.
I think you'll enjoy it. I'm sure it'll bring back some not so fond memories.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
and, it's pretty danged funny, too!http://www.tvwsolar.com
I went down to the lobby
To make a small call out.
A pretty dancing girl was there,
And she began to shout,
"Go on back to see the gypsy.
He can move you from the rear,
Drive you from your fear,
Bring you through the mirror.
He did it in Las Vegas,
And he can do it here."
It's funny when he does it, horrible when it belongs to you.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Have you seen the stock trading ad with the baby golfer? That's me, Frank Shankapotamus<G>http://www.tvwsolar.com
I went down to the lobby
To make a small call out.
A pretty dancing girl was there,
And she began to shout,
"Go on back to see the gypsy.
He can move you from the rear,
Drive you from your fear,
Bring you through the mirror.
He did it in Las Vegas,
And he can do it here."
You don't cheat around the cart path tho.
Man, cold and blowing today. Back to pre spring conditions. And 3 mangolfleague was to begin wed.
####.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
That was funny! Thanks for the laff.
If you can't accurately "forcast" you probably have no business doing the job in the first place
30 years in this business has taught me one thing - you are completely ignorant of reality if you think every knowledgeable contractor, or any knowledgeable contractor, could forecast with pinpoint accuracy the cost of a remodeling job, or a custom build. Can't be done, never, not ever. Its an educated guesstimation at best, buttressed with a hope and a prayer. Don't let anyone tell you different."...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
Hourly rates and what's unvolved
I recently completed an hourly job for a homeowner selling his house and needed various jobs done for the inspectors list. When I submitted the invoice for T and M, the homeowner said she wanted a detailed hourly sheet because she thought the hours were high. I went over verbally the days there and added that when I needed certain materials that were unexpected she said "oh no, I'm not paying for you to go shopping". I have always charged materials gathering for the job as hours worked. Later when I spoke to the husband he was also on her same page and agrued that If I had to go pick up topsoil in my own truck and bring it back to his residence, too bad, I'm not paying for it". Am I out of step? He said I soaked him, but my final bill was only $206.00 more than he was expecting. Any thoughts?
It's probably good to try to set expectations in advance. If you do T&M a lot with "novice" customers you maybe should write up a page of explanation to hand to them before the job is signed.
But I think you were fair, so long as you were being reasonably efficient and not running to the store every 15 minutes.