I’m wondering how the “full-line” or “general contractor” type remodelers estimate work done by sub-trades.For example I’m wondering:
- Do you produce an estimate using data from a published estimating manual and then use that as a budget for your trade contractor?
- When do you call the trade contractor in look at the job themselves?
- If your having several different trade looking at a particular project how do you schedule to meet with them so it’s economical on your (and their) time.
- What kind of information is critical to get accurate sub-trade estimates
- Do you get or solicit unit costs from your trade contractors that you can then use to estimate the project yourself?
- How do you deal with phone quotes?
- If accurate job costing your projects is the key to developing accuracy in you own estimating how detailed do you get in job costing work done by the sub-trades.
I suspect there are as many different answers to this question as there are “types” of contractors so I’m interested in hearing other points of views. I also wondering what is the sub-trade contractors point of view?
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“Systemize the Routine; Humanize the Exceptionâ€- from Customer Culture: How FedEx and Other Great Companies Put the Customer First Every Day by Michael D. Basch
Replies
I think you are talking about a big job . I call all subs in the same day to bid . I only call one sub from each trade and they can only work that job for me. All bids are compiled to make the big one . We bid as a team and we win or lose as a team ....
. I dont know a better way of looking at it.
Tim Mooney
Tim, I asking "in general'... period" not just big or bigger jobs. I ask because I'm probably 80% a subcontractor nowadays and I think I see a wide spectrum techniques and methods. I'm currently in the process of developing bids for a few very prestigious upscale builders and I was amazed by the thoroughness and completeness of some of their RFPs.(Requests For Proposals, do you all call them that or something else?). With one package that was provided to me by one builder all the documents weighed in at 15-1/4 pounds!
A yet there are other builders who ask me to give them a price for a project and it means (for example) coming to the site and looking at an empty shaftway opening and they want to know how much will a stair cost without really telling me much of anything at all other than that they want solid oaks treads or something like that. Nothing about the balustrade or railing profile. I just wonder then what did they tell their clients when they sold them the project in the first place?
I also had it where when I give them a price they give me the "it couldn't be that expensive" story and I wonder just how do they know? How do they know what it should be if it's taken me a couple of years and a lot of experience to come up with my estimation methods. If they already knew it should cost $XXXX.00 why don't they say "we've estimated this project to be $XXXX.00 will you do it for that?"
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“Systemize the Routine; Humanize the Exceptionâ€-
from Customer Culture: How FedEx and Other Great
Companies Put the Customer First Every Day
by Michael D. Basch
Jerry,
Hope all is well with you. We work with a great group of subs! Loyalty builds great relationships and projects! We don't price our subs against each other at all. Heres how we do it...
1. Complete drawings, specs and scope of work and get client approvals.
2. Send copies to all sub contractors needed.(we include the scope of work for each trade so it's clear what they are to price)
3. Schedule on site meeting with all involved. We usually schedule them about 30 minutes apart to be able to recap the project and answer any questions they may have.
4. Subs turn their fixed pricing back to us within 7 days and we compile all the numbers for the final contract with the client.
Since we are a design build firm the chance of us NOT getting the project at this point is pretty low. The client has paid us for our design work and are ready to move ahead.
Our subs love this type of costing as it's typically not a waste of time for them.
Take good care
Candi HIlton, CR
Hey Candi nice to see you here. All wasn't well this past weekend. I got what
I guess you would call a "stomach flu" from my brother and I was sicker
than a dog the past few days so that's why I've been slow to respond. Wow was
that a bummer.
Candi I really like your list but it still leaves my question —how do
you (the GCs) know how much that stair and balustrade are going to cost ahead
of time.
I realize in your case you are really operating under a Construction Management
type of contract arrangement. If I understand how your company operates correctly
you haven't given a fixed price to your client before you call in your subs.
And... if you do as part of your process give the customer a preliminary estimate
how do you know what to say about that stair? Historical data? And if so that
brings up the questions how much historical data can a GC accumulate, and how
does the GC organize and record it so it recallable and reusable?
When you say "Our subs love this type of costing
as it's typically not a waste of time for them." Does that mean
they get 100% of the work they price for you so that makes it worth their while?
Otherwise if you are charging your homeowner/clients for estimates shouldn't
you be offering to pay your subs for their estimating time?
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“Systemize the Routine; Humanize the Exceptionâ€-
from Customer Culture: How FedEx and Other Great
Companies Put the Customer First Every Day
by Michael D. Basch
Hi Jerry!
Hope you are feeling better by now! Interesting topic. A couple thoughts on your post.
In our process, We agree to a budget range amount with the homeowner in the beginning of the design phase. This is a separate contract from the construction contract. If the design would include something like custom stairs we would use a number based on experience of past projects and let the owner know that the numbers discussed are ballparks and will be finalized after the sub can look at the project, see the drawings and the final scope of work. There are no guarantees that what they want will cost what the last job did. If it's something we have NO idea of, and it's something that could move the project way past their budget, I would make a call to our sub and talk about cost ranges based on the concept we discussed with the owner. Our subs know we don't make them stick to that "Phone" price because they haven't seen the final project.
So you can see that our clients don't have a fixed price until the the sub contracts are in and the final contract is prepared. There is a range that we agreed on and the design, scope of work and Specs are completed to keep them within that budget. Now if they decide they have to have a stair case design that costs $10,000 more than our original discussions... The budget ranges are adjusted and they know that well before the construction document is drafted since we know that adding the more intricate peices will add costs, we discuss that as we go thru the design.
Since our clients pay us for all the prework. Design, Specs, Scope and costing. They are committed to us building the project. Only had 3 back out and not build the project in the last 4 years. All related to some personal job or stock market situation.
So yes our subs do get pretty close to 100% of the projects they price for us. Interesting you should ask about paying them (subs) for their time. I have offered to do that and they all said that is not necessary because they know the job is theirs after the contract is signed. If I had an intricate custom stair project that you were to build I would likely contract with you to design it during the design phase and pay you for it. It's likely that there wouldn't be anything missed if you were the one designing it and building it!
I have heard how other GC's go to their subs and TELL them what they put into the costs for the trades work on the project. I couldn't fathom doing business that way. Telling a partner how to run and price their projects because I decided this was how much it would cost! We use the job site walk thru as a way to make sure that all the bases are covered and that we didnt' miss something that was important and to allow our subs to know all the details of the project. No surprises for us or them and all of our bottom lines are protected. WE aren't plumbers, electricians, stair builders etc. That's why we use experts in the trades.
I can see where a product like yours would be difficult to estimate in the early stages. I wouldn't attempt to try to keep a record of all the possible nuances that could add to the different trades. I do have some basic info from some trades (elec, plumb, drywall etc) that I utilize for basic projects. Anything special, is priced by the trade after the drawings ,specs and scope are finished. It's the fairest for everyone when dealing with a fixed price contract.
Ok it looks like a wrote a novel here. Better go. WE are headed to Indy for the remodelers show this AM be back on Sunday. Talk to you all later!
Take good care
Candi
I play both sides of this issue .I have a couple of builders that do remodel jobs on the side.They both call me first to see if I can fit them in then we will meet at the prospects home usually the plumber and eletrician and me [tearout,framing,repairs]will meet with builder at the same time to discuss how and why so we have a good idea of whats expected. then I figure how much I will have in the job and triple the price. This has been a fairly accurate method for the last 4 years and the builder has never tried to beat me down,if I am way to high I'll try to make it good by doing some extra stuff not in the original scope . So far I haven't been to low but I've been right on the money several times and I have done really well a few times . When on my own jobs I have used several different methods ;cost plus,square ft bids , and just educated guesses. I have been pretty accurate all 3 ways but I have been short before and taken the hit. Little jobs have been the most profitable and have developed large clientale base which has got me covered up for the next year plus.
ANDYSZ2
I have a client that I've done light comercial work and a lot of home remodeling for over the past 6 years usually 2 projects a year. His theary proves almost true 90% of the time all subs cost $4750.00 on average.
He said that jokingly so I looked at my past estimates and invoices, it proved true or very close to true, now this is strictly in remodeling and the funny thing was is it was either an average of 4750.00 or an incriment of that on his kitchen remodel.
1. cabinets $9,870.63
2. granite $14,185.88
3. plumber $4,848.30
4. electrician $ 4,258.12 including permanent fixtures.
5. my fees and labor $19,026.34
the list goes on.
1REMODELER I've got to think the pricing system that client of yours uses is at best lucky or works only because they are doing generic projects that repeat themselves over and over again. I can't see that as being a viable real world system that could be repeated by other contractors successfully. Ya know when I go grocery shopping it always seems to cost me $40. I get the same or same kinds of stuff everytime I go and I always limit my buying so that I can carry what I bought out to my vehicle without having to take a cart with me. If someone here asked "how much do groceries cost is $40 an accurate reliable and repeatable answer? Probably not.
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“Systemize the Routine; Humanize the Exceptionâ€-
from Customer Culture: How FedEx and Other Great
Companies Put the Customer First Every Day
by Michael D. Basch
I see where you are comming from. I know the prices some subs get for different things , but I would guess that the remodeling industry would change that because every job is different. I have done a lot of sub work and I cant see how they could hit my total . I for one have to figgure it . I would not do the stairway you mentioned,and I would need your price exactly from the plans the owners specified. If you figgured me in to do the drywall , that might be easier from past history with me. But if the top of the house had something like a dome in it , you better have me out to take a look . I used to tape for a contractor and he bid a job with out me . When he called me to do it , I told him how much more I would need to do it because of a b c d , etc. He said he never thought of that . The only way I see to turn in a bid on a hard remodel with out the subs help is to hit it" high". WE all know that we can hit a lot of things like roofing for example. Drywall if its simple , or with a minimal amount of extras that he had been charged for before . Metal for example comes to mind . He would know that charge from working with me before. But a round room ? Nope ! Painting also could get very involved , just like trim . I know there are programs , but I dont use them . May be someone here does ,....................
Sorry I couldnt be much help.
Tim Mooney
"Sorry I couldn't be much help" Whaaa?
Wha ya talkin about? I wasn't really looking for help" so to speak as much
as I was looking to discuss and explore the concept for which your comments
have been very helpful.
If there is one thing I am not it's a fundamentalist or absolutist. I'll never
really advocate a one answer fits all solution so I was and am interested in
hearing form all the different points of view, large and small, sub and GC.
When you say "If you figgured me in to do the drywall
, that might be easier from past history with me. But if the top of the house
had something like a dome in it , you better have me out to take a look ."
that's exactly what I wanted to get at and explore. Of the GCs who don't have
detailed plans and specs for me to look at in the past year only one GC has
asked me to go with him to look at a particular project ahead of time.
Sometimes I get the impression that some of the GCs are afraid to bring you
in before they have contracted with the Homeowner because they are afraid the
Homeowner might potentially try and contract directly with me and cut them out
of the process.
Sometimes I think they are too proud to admit they have really no idea about
what it costs.
Sometimes I think they got the price out of an estimating price book like (which
I don't think is such a bad idea if it is applied correctly)
As long as you mentioned software " I know there
are programs , but I dont use them ." here's something I've been
thinking about and toying with. In my case I actually have designed the software
that I use to estimate our projects. If I gave you ( the GC) an edition of that
software and showed you how to use it. You could then use it to estimate your
projects based on our prices and then submit the proposed estimate that you
had developed to me just for my verification. Is that plausible?
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“Systemize the Routine; Humanize the Exceptionâ€-
from Customer Culture: How FedEx and Other Great
Companies Put the Customer First Every Day
by Michael D. Basch
You are alot further in this than I am already. Im wondering how he could figgure his "particualr job hes never done before " , from your software. I guess Im thinking about me and all that I might be able to do differently. I dont do the big jobs anymore , and I never did except as a sub , or a superintendant. My experience always relies on bringing in subs to bid . I have a friend who is a home builder that had figgured the brick layer in. He only wanted the foundation covered , brick steps , mail box , etc. So he figgured the going rate per brick that this sub had always charged him . The guy gets there and said I need more money on this one . How come ? Cause this footing is a lot of work to get the brick out of the ground with all the step ups on the side of this hill. Once I get it out , Ive got to level it off and quit . Ive got the same steps and mail box , etc . , which is not where I make my money. My money is made in the wall, .... where you want the siding . Ive got three full houses waiting on me if you disagree. I can make the same price per brick on them , as you had in mind . Up to you.
So I dont see it happening correctly with out talking to the sub on the telephone at least.
Tim Mooney
We try to get firm quotes from our major subs when we have good enough information for them to give us an accurate price. We can do this with our foundation subs and our masons but usually the plans that we get are not complete enough for our plumber or electrician. They both have to do a lot of design work as the project is in progress. As the general and the carpenters, we are usually in the same boat. We can usually find historical data for a comparable project in our recent past and we will use this as a guide and it is not a bad guide even when we do have detailed plans. The most important thing is to put in enough to fill that big empty hole.
Jerrald , I had lunch to day with a retired commercial general contractor . I asked him your question about the stairs and anything along those lines ." How would he have bid it with out him? "
He says he has national average books like a bodyman gets paid on a fender . Then he applies the cost per hour in our area. He also has this information in a computer program that spits it out at him a lot faster.
He also kept records of past performance , prices and times for each function that was done. He said he logged subs time ! He told me that he could get very close to knowing what he was making per hour on him. That information was kept and used for future reference. He said that stairs in a certain quality would pay per foot pricing. Add ons and deletions type of thing . The software kept records and that is all. He said he had no use for median pricing programs .
He didnt like to call the sub unless he had to, but if his information was too hard to obtain he would . He was the type that took three bids on everything.
That was his take on the subject.
Tim Mooney