Hello, I am 2 years into owning my own construction company (11 years experience) and I am estimating what may be my first whole home frame project. I have come up with about $17 a square foot (including truss and sheathing/ labor,crane and nails only)and want some experienced folks to opine on whether I am competetive at that price or way out of line. I know I can do it at that price. This project is outside metro Denver. Thanks for the help.
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Birchbark do you really think price $17 a square foot will cover ever type of floor plan you'll encounter? That's a real dangerous assumption.
For a couple of weeks now I've been over in the JLC forums debating the merits of Square Foot estimating, that is basing your price on the square footage of the project living space. There is no real hard correalation between the square footage of the project living space and how much time and material the project will take that you can trust. To be really safe and secure you really need to work from a Systems or Unit Cost Estimate to bid a framing project.
I have a paper I wrote entitled The Hidden Dangers of Square Foot Estimating and there is a great article from the July '99 issue of JLC by Sal Alfano entitled Unit-Pricing Pitfalls that illustrates the problem too.
In that article Mr. Alfano writes that if an estimator doesn't identify the correct Unit or Units to estimate a project by then the contractor can really take it hard on the chin. The article gives some excellent examples of why SF of living space is the wrong Unit to base an estimate on. Quote:
On page two of the article there is a excellent chart and graphic display where Mr Alfano illustrates the problem of even using SF as the unit in a what is an Assembly or System cost. He compares three different shapes of the same 400 SF 2 x 10 Deck System or Assembly and then he writes:Quote:
A Square Foot estimate is subject to a typical error of ±15%. That means the average error is ±15%, the real range of error is much greater and I looked at projects where a SF estimate would have been of by 35% and I am sure there are project scenartios where that could go even higher.
The arguement over on JLC for those in favor of SF estimating is well all the framing contractors do it so it has to be the right method. Well I know more framing contractors that complain about how hard it is to make money in this business than I do any other trade contractor and I attribute that to there using SF forumulas to estimate projects.
I've posted this graphic her before. The two floor plans below are both 750 SF. Which one will take more time and materials to frame?
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Thank you for the reply. I understand completely and agree. I did not price on a squarefoot scale. I did break it all down to its seperate components (fuel,nails crane, hours for floor assembly, hours for exterior walls etc.). It was when I saw the total that gave me a jolt,as usual, until I sit back and realize I can do it for that price or not bother doing it at all. Its just that when I mentioned the price to a friend in the trade he commented that I had better hope I wasn't bidding against anyone else. I understand that there is always a lower bid, but I just wondered if I would be presenting a solid competitive bid or something that would get me laughed off the site.
Birchbark - "I did not price on a squarefoot scale. I did break it all down to its seperate components (fuel,nails crane, hours for floor assembly, hours for exterior walls etc.)."
That's good you are on the right path then. Most of the time you know how framers come up with their Square Foot prices? They ask around to find out what everyone else is charging and then they charge just a little bit less. I think maybe 3 out of 5 framers that I've talked to tell me that. I think that's potentially suicidal. So at least you're on the right path. In that other discussion I wrote that a framer should:
How much time and materials will it take to set up the post and beams that support the structure.
How much will it take in the way of time and materials to assemble the first floor deck platform.
How much time and materials will it take to put together and tip up the exterior walls
How much time and materials will it take to erect the interior walls
How much will it take in the way of time and materials to assemble the second floor deck platform on top of all that
Etc. etc. until he worked his way up through the whole project
Then when he job costs the project he at least has some estimates and projection to compare with what really happened.
With a SF estimate and if you don't time and job cost the different segments of the job you have no way of knowing where your estimate was right and where it was wrong.
I've been thinking more and more lately that a framing contractor who uses Systems or Unit Cost estimating holds an incredible competitive advantage over his or her Square Foot Estimating peers. Lets say $17 a square foot is the market average for framing in your area. If you are a Systems or Unit Cost Estimator the prices you give for projects are going to probably range from $14.45 per SF to $19.55 per SF. What will happen is you might loose a lot of the high priced bids to the $17 a square foot guy but what the heck do you care. You know he is losing $2.55 per SF because you know the job he or she won at $17 really costs $19.55. You will probably win all the the jobs $14.45 per SF since that same $17 per SF contractor was too high on those. And your right there in the mix for the middle of the range too so you'll pick up your fair share of those $17 per SF projects too. You certainly don't want every job you bid on. You only want the ones where you know you will make money.
Eventually that $17 per SF contractor may do enough of those jobs that they should have charged $19.55 per SF for and they'll be out of business.
"but I just wondered if I would be presenting a solid competitive bid or something that would get me laughed off the site."
I can't tell you anything about that. I'm in NY CT so I wouldn't know. And there is no harm in getting laughed off a site with a high bid if you know for sure that what it costs. You'll be the one laughing at the contractor who took the expensive job for the bargain price and he who laughs last laughs best.
The one thing you have to do is keep up with your marketing. You do need to get invited to bid on more jobs to make up for the ones you are going to lose.
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Thank you for the response, it was very informative. I appreciate it. I also researched the chat log and found many other responses of yours to others on the same subject. Although I have not quite broken my numbers down as low as some of the assemblies you spoke of with Brian in '03, I did break it down thouroghly to my liking. I feel more comfortable now with my numbers as I know I can make money on it. It was a feeling that with other carpenters refering to sq' pricing I felt as though I was missing the sq' boat. Now I am more comfortable sticking with (yet honing) what I was taught by my carpentry mentor, which was figure out what it will cost you- add 15-20% to CYA and if they don't accept it..... tough, you can't afford to do it for less. Thanks again for the insight. Birch
Did you estimate the job in some way and then at the end, with a lump-sum number, back out the per-square-foot figure?
Some of the Breaktimers here will say, "we hope you did that." Mr. Hayes has already weighed in with his thoughts about throwing out unit prices as "bids."
Where I am, a framing sub's bid includes labor only, no materials of any kind, but it typically includes installation of wrap or felt, all exterior doors and windows, and all roof flashing, underlayment, and shingling. The GC furnishes everything, including hand nails.
What does your bid include?
Tell us something about the job. Number of floors, staircases, exterior window and door openings, exterior wallframe corners, roof ends and transitions (gables, hips, valleys, dormer openings, pitch changes), steel beam members, etc. If it is a trussed roof, and if you've seen truss plans, tell us how many trusses there are, and within the total truss count, how many different types.
Repetitive truss erection can go fast. Non-repetitive is a lot slower. I have one to do soon that has 155 total trusses, but within that, there are 43 different types.
Most importantly, how do you think your bid compares to your competition? And what do you bring to the table, that your competitor doesn't?
Edited 3/26/2005 12:20 pm ET by Gene Davis
Hi Gene. No I didn't est. with a square foot number (see other reply). I came up with the $17 after, for comparison. This particular house is 3 story, basement concrete. 3 40' steel beams, TGI floor construction, 2x4 and2x6 walls. It is 1600 sq' main floor with 900 sq' on the upstairs level. Very cut-up truss roof, have not seen truss schedule but I know there are many (100 or more) with many diferrent types. I did a truss project on a concrete home last summer very similiar, lots of hips, gables etc., 12/12 pitch. Including soffit and facia, no roof paper or tyvek at this point (may bid siding as well). This pitch is 6/12, much better. Hopefully that paints a better picture. Again, I know I'm covered at this price, just a bit worried about competition, especially from very far south. I've worked with this GC before and I believe we will hash out the price before start and I believe I probably don't have comp. but I just want to know that I am in range before presenting it. Thanks for the input.