I have been asked to start a new thread on this subject so here goes.
My partner and I are building a new house. This is the project of our lives and without being too crackers, the project that we were meant to do for a variety of reasons. So it’s a really big deal for us and is in itself a really big deal.we are doing this project in 2 phases. If you’ve seen it on other threads, the first phase is a shop, garage and guest quarters. The second is the main house. Likely a 1-2 year gap between phases. The phasing is purposefull – avoids a huge load of debt, gets us there on a temporary basis earlier, and serves as a trial run for the builder.
The house is custom, archtect designed but I stress really, really simple in many ways. There are no curves, no fancy trim, in fact no real trim at all. The construction is steel truss (7 bents that mimic the queen bent construction of our barn), mostly 1 floor with a mezannine, envelope is stick framed with outsulation, standing seam galvalume skin with some curtain wall glass, stone (a fair bit), no eaves, soffits, or gutters (all water is handled by french drains at the wall bases). The interior finishes are simple – concrete floor, single wood species mill work through out, no drywall, single counter surfaces . . . . in short, simple design that I think will require more attention to the details given that the architectural features are so “obvious”. The house is a home for our art collection and for us.
So what are we looking for
– someone who understands what we are trying to achieve
– an accurate estimate of costs (and I know that means we have to be responsible about planning, limited/no change orders, clear drawings etc)
-clear communications
-good problem solving capability
We started with 10 builders and have narrowed the field to 4 based on interviews conducted with them all. The 4 that are in all were interested, provided references, “got” the plans and the design, and asked reasonable and inteligent questions about the design – and some of the tricky points (how the shear forces are transferred from the windside walls etc as an example)
So here is a question for you builders – how are you most comfortable working in terms of costing? Do you like a complete, detailed set of drawings that you provide a full costing on? Or, do you prefer to do an estimate and then work on materials, labour, plus percentage? All of the builders we have met prefer the latter and I think I understand this well – time/materials plus percentage seems to protect everyone. The builder isn’t potentially skinned by unforseen problems that arise. The homeowner will get what they really want rather than shorted if the job is going longer or unanticipated problems arise. To the builders, are there problems with this approach? Do you think it encourages less than accurate estimates, if the builder knows they are not really held to the estimate anyways (can claim unforseen problems, this is a more difficult job, etc)? What do I as the homeowner need to be aware of as we start this part of the process (and beleive me, I’ve already had some lost sleep over it)? We really want to enjoy this part of the journey bc for us the journey is just as important as the final destination.
My biggest fear is that if the drawings on which estimates are given are not accurate, that we will not have a complete understanding, and neither will the builders, of what is required. So if the millwork is not completely detailed how does a builder, or how can a builder, give an estimate that is any way accurate? And for me, I am nervous with the uncertainty that an estimate of x might become real cost of 1.7 x. How do we do this in a fair way that makes us all comfortable? If we ask for a full cost on a complete set of spec. drawings will the estimates be all highballed in order to protect the business. AT the end of the day I am fully prepared to pay what the project really costs and I am not interested in skinning anyone: I just need to know pretty closely what that cost will be up front.
At what point in a materials/labour plus percentage cost plan should a homeowner get worried if costs seem to be out of line with the estimate, assuming no change orders and no unforseen problems?
Replies
Are you thinking of doing this as two separate deals? The time between completion of the shop/guest building and the main would certainly seem to make it so.
Why not focus now on getting the most complete set of plans and specs possible on just that first phase, and then getting lump-sum fixed-price bids?
Oh that answer is easy - I know that the architect is interested in having the drawings completed as 80 percent of the fees are tied to drawing completion. At this point the plan is that spec drawings which I have been told will specify in clear terms the construction type, have many of the sections, all of the elevations,etc but will not contain all of the construction details, will be issued to begin the estimate process.We knew that process with the architect would unfold this way so it is not a surprise. This is someone we really wanted to work with, his product is second to none and is a match for the esthetic and the way we want to live. That part is OK.The build will be in 2 stages - and the first on is physically smaller but will have alot of infrastructure costs - all of the componenets that are needed for the final build - septic, well, geothermal field, laneway, hydro - all of this is part of phase 1. We knew that going in too. We will cost the first phase stand alone. The first phase will be a trial run for the builder and us. Does the relationship work is the foundation question.
Mark,I have not see the "other" thread(s), so I am just going by what I see in this one. I'm not sure how you expect any builder to give you an accurate bid (total job) without seeing the 100% finished plans. Sometimes while 1 elevation looks simple enough to do... the "details" of how it is accomplished might mean thousands of dollars in materials and/or labor. At this point the details are not ready for either you or the builders to see if I'm getting this right?Have any of these builders worked with this particular architect before? Either on a regular basis (every year or so), or at all even in the past? If they have worked with him, they might be able to get a better idea/understanding of what exactly is going to be in the "details". How much longer before the plans are finished? You said 80% of the architect's fees are tied to completion of the plans. In addition to completion of the plans, is any portion of the architect's fee tied to submission and approval by your local building department? (Meaning that just because he can draw something special, does not mean it will fly with your building department). If after submitting plans, they determine changes need to be made, will your architect cover that for his original fee or will you have to fork out more money? Maybe I should have asked sooner in this, but are any of these details that he is still finishing up, related to the structure of the building itself (frame, foundation, envelope, etc)? Or are they strictly how you will finish out interior trim stuff? (even though I think you said no trim).As far as you are concerned, is there anything to worry about with a labor/materials + % markup? Yes there is. Even though a builder may use this (and it happens all the time) method, how do you know if these 4 of 10 that you picked out, are efficient with their time and materials in the first place? If for example (assuming everything else is equal..quality, etc) Builder A does it for a fixed fee of let's say $300 a sq foot and you think that is too high....but builder B says...materials/labor + markup.... What if along the way you see that Builder B is sooooooo slow that it will probably end up costing you $350 sq foot by the time he is done? Also, being that there seems to be some interesting details in your plans, if the builder is not familiar with those..it may take one of the builders longer to do it than another...and if that's based on time/materials/markup....you could get screwed.Maybe I missed it, but is there a reason you are in a hurry to get bids BEFORE the plans are 100% drawn?Of the 4 builders, what is the breakdown of what they would prefer to do? 2 fixed...2 time/materials/etc? One more thing. Being that there will be a big gap (1-2) years between stages, what method will be used to account for prices changes in materials, labor, inflation, building fees, possible new ordnances/codes by the city, etc? It's kind of difficult to give a fixed fee for something 2-3 years out. In this case, the builder would almost HAVE to cover his *** by cranking up the bid enough to his/her comfort level.
99092.4 in reply to 99092.3 I have not see the "other" thread(s), so I am just going by what I see in this one. I'm not sure how you expect any builder to give you an accurate bid (total job) without seeing the 100% finished plans. Sometimes while 1 elevation looks simple enough to do... the "details" of how it is accomplished might mean thousands of dollars in materials and/or labor. At this point the details are not ready for either you or the builders to see if I'm getting this right?- Agreed. My concern voiced to the architect is that we cannot have an accurate estimate to compare one builder to another and we cannot know, within reason, what we can expect as far as cost, until the builder knows what he is estimating on -Have any of these builders worked with this particular architect before? Either on a regular basis (every year or so), or at all even in the past? If they have worked with him, they might be able to get a better idea/understanding of what exactly is going to be in the "details". - no, none have worked with this architect. We have been in many of his homes on the east coast of Canada - he has done institutional work and limited residential work to this point, in Canada -How much longer before the plans are finished? You said 80% of the architect's fees are tied to completion of the plans. In addition to completion of the plans, is any portion of the architect's fee tied to submission and approval by your local building department? (Meaning that just because he can draw something special, does not mean it will fly with your building department). If after submitting plans, they determine changes need to be made, will your architect cover that for his original fee or will you have to fork out more money? Maybe I should have asked sooner in this, but are any of these details that he is still finishing up, related to the structure of the building itself (frame, foundation, envelope, etc)? Or are they strictly how you will finish out interior trim stuff? (even though I think you said no trim).- the structural details have been finished but many of the interior details have yet to be done, hence my concern. The arch. fees are a fixed envelope and include approval of the plans and construction supervision. No additional fees outside of the agreed contract -As far as you are concerned, is there anything to worry about with a labor/materials + % markup? Yes there is. Even though a builder may use this (and it happens all the time) method, how do you know if these 4 of 10 that you picked out, are efficient with their time and materials in the first place? If for example (assuming everything else is equal..quality, etc) Builder A does it for a fixed fee of let's say $300 a sq foot and you think that is too high....but builder B says...materials/labor + markup.... What if along the way you see that Builder B is sooooooo slow that it will probably end up costing you $350 sq foot by the time he is done? Also, being that there seems to be some interesting details in your plans, if the builder is not familiar with those..it may take one of the builders longer to do it than another...and if that's based on time/materials/markup....you could get screwed.- and that brings a question. How do we know, if the construction is less typical, whether or not the builder can do and can be efficient? Talking to references is clearly part of this, particularly if those references were on less that conventional construction. This is what makes me wonder if a total cost estimate is a better route when the construction is not conventional - but I'm not a builder so I might be way off base. Like most of us, cost certainty is an issue -Maybe I missed it, but is there a reason you are in a hurry to get bids BEFORE the plans are 100% drawn?- from my perspective, no. I want the best pathway that brings the best product, that's all -Of the 4 builders, what is the breakdown of what they would prefer to do? 2 fixed...2 time/materials/etc? - of the 4 all are most comfortable with t&m. They are all local (within 20 minutes of the site) and it's a small community and everyone knows everyone. That may be an advantage. We've done alot of homework and we have people that we really trust in the community (we/ve owned there for 3 years) and they (and they are subs with experience and trust) have confirmed that the 4 are good choices. -One more thing. Being that there will be a big gap (1-2) years between stages, what method will be used to account for prices changes in materials, labor, inflation, building fees, possible new ordnances/codes by the city, etc? It's kind of difficult to give a fixed fee for something 2-3 years out. In this case, the builder would almost HAVE to cover his *** by cranking up the bid enough to his/her comfort level- sorry, I may have brought confusion here - the bids will be on 2 separate phases. The second bid will be at the time of the second phase -
One of the problems with T&M and both you need to be very clear on how time is figured.Is it limited to actual time on the site? What about "non-working" time (reviewing plans, order materials, preparing bills, writing up building permits, etc) is all of that going to be paid time? Is some of it going to be covered by overhead?Also who pays for true screwup. I am not talking about unforseen problem such as rocks that need to be dug out or mistake in the plans that require reworking.But that the contactor cuts a beam short after spending a couple of hours preping it. .
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
T&M isn't really the same as cost plus. My advice: Make sure your contractor and architect are on the same page.
T&M isn't really the same as cost plus.
It's not? Please, how exactly does it differ?
I think Dovetail explained it nicely.
No, he did not explain anything, as it relates to your claim that somehow "T&M" differs from "cost plus."
He was explaining the terms of a contract more often used in commercial contracting, that of "cost plus a fixed fee."
I have boilerplate contract language that sets up both "cost plus percentage" and "cost plus fixed fee."
If in your view, T&M means "plus fixed fee," and cost-plus means "plus fixed percentage," you could have said so, but you didn't, and so I asked.
No, you're being snotty and irritating and I wasn't even replying to you.
T&M is labor time plus materials.Cost plus is all of the costs to build plus a fee to manage the project. One is used for handymen and individual trades, usually for repair work. The other is used for GCing large projects.Cost plus is becoming more and more standard for residential work especially for custom homes.
I personally like lump sum contracts with allowances. But I wouldn't think that a cost plus is bad for anyone involved. A cost plus arrangement does not relieve the GC of his role as the expert on costing and production. You still need to provide a good faith estimate. So T&M is not exactly the same thing as T&M as I stated.
Thanks for the comments. As far as the prep time etc, perhaps you can tell me, how is this best covered? In a cost plus situation, that would be covered in the plus I expect. In t + m it would be a black hole and the time could be "adjusted" without really knowing what was required.How are screwups adjusted/ handled? I would think that these would be in the contract. So a building i was recently in that had a floor pour 3" too thick, the GC ate that one . . . . . in the contract. I would expect that a contract should be that specific.Thanksmark
I really don't know. I am not a GC.The main point that I was getting to was that both of you are not only on the same page, but each sentence, and each period.And one of it might be how well the different contractors have tracked their cost and how they assign their cost.It already appears that construction materials will be non-typical. The worst thing that you could do was to "force" somekind of pricing structure on them that is different that what they normally do or have records on.Probably the best thing that I can suggest is that you ask them, completely open ended. Then depending on there respose ask for clarifications, adjustments, etc and see if you can come up with something that YOU are comfortable with.The advantaged with a fix cost bid is that you know what it will cost in the end (you still have unknow conditions such as rock in the ground or large material price changes), but have the basic price down.It does not matter what kind of a businessman or how well he tracks his cost. If you are comfortable with the $####,#### bid then it is so. If me makes $xx,#### on it or loses $xx,#### on that is not your problme.But with a T&M and are more of a partner. And, from what I understand from the commments, that is probably best for a job like this. Just that it puts you in a different position..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Mark,
If I were one of the contractors I would be promoting "Cost Plus a Fixed Fee" contract.
"Costs" are:
1) Material with no mark up added.
2) Subcontract costs with no markup added.
3) My labor at site as well as any labor I employ, again no mark up
added. All at an agreed upon hourly rate that reflects the actual
cost to have the employee on site
4) Office time, bid time , phone time etc. is all billed at my agreed
upon hourly rate.
rate.
5) Permits , fees etc., Any and all Costs associated with your project.
Fee: I would generate an estimate of project's total coast just as close as if I were bidding the job, then I would use a % of the number as my fee. lets say $100,000 estimate, 12% is fee charge.
Now you pay for costs and you pay me 12% ($12,000) as a fee to manage the job .
My fee doesn't depend on the complexity nor time involved, nor market variables in terms of materials of subs.
I am guaranteed that amount of income over and above my hours (it is my profit), You are guaranteed that I won't run up costs so as to increase my income, you are also guaranteed that you will see the actual costs of all the components of the job. You can make changes to the scope without without undue haggling over costs etc.
I get paid an hourly rate for everything I do associated with your job, plus my fee.
Dovetail97128,One item, (#3), I'm not clear on. 3) My labor at site as well as any labor I employ, again no mark up
added. All at an agreed upon hourly rate that reflects the actual
cost to have the employee on siteWith this, are you as the employer of your 2, 3, 5 guys, etc.. "marking up" their labor at all? It sounds like you're not, but how could a business be a business w/o marking up his/her labor to make a profit? What are you counting as your labor rate? Hourly rate? Any taxes (SS, etc) you are responsible for? Any insurance (unemployment, health, etc) you are responsible for? Truck fees? Tool fees? Equipment maintenance fees? (basically all the normal stuff you HAVE to charge for).Or are all of these included in the 2nd part of item #3? "all at an agreed upon hourly rate that reflects actual cost to have the employee on site"?And again, are you as the employer getting no extra off your employee's labor? Is your sole compensation the hours you put in, and then the fee for managing the job?Just checking.
jj, Included in the hourly rate are all the costs associated with payroll. that includes SS, taxes, medical insurance, comp. insurance, a pro rated cost of liability insurance .etc. The hourly rate also includes a certain amount to to "tool up", but maintenance or purchase of specialty tools falls under "cost of job" "" Or are all of these included in the 2nd part of item #3? "all at an agreed upon hourly rate that reflects actual cost to have the employee on site"?"" That is correct by MY way of doing it.
""...are you as the employer getting no extra off your employee's labor? Is your sole compensation the hours you put in, and then the fee for managing the job?"" You are correct , I get paid an hourly rate for work done, my profit comes only from the fee.
Edited 1/6/2008 12:39 pm by dovetail97128
I agree too that Dovetail summed up a possible working arrangement pretty good.
I don't know wether you were thinking this far down the road when selecting an architect but in deciding on a builder, one thing that should stand out is the winning candidate should be part of the team the architect has worked with before to produce a successful (and within budget) project. Like any sports team, the second season with the same players is usually better then the first season.
I am an architect but have been more on the building side the last 15 years (I'm currently in the middle of GC'ing the third house for myself and my wife) so I understand the complete drawings/incomplete drawings vs. pricing dilemma. My advice would be to forego developing complete details and go with estimates. There's too many things that change in the course of constructing a truely custom house to justify complete details beforehand. Select a builder, give him a nonrefundable deposit (but applied to his fee if you go ahead) like 10K to come up with an accurate reliable estimate and go cost plus for the project
No architect knows everything about every trade on a job. The tradesmen are the ones who know their craft best, as they should because they do it all day long every day. So take millwork (per your post) for example; your architect draws up all the millwork details, you pay him for it and you give the drawings to your builder who then gives them to his millwork guy. Well, lo and behold the millwork guy looks at them and says he can build it but this one detail has piece that is special order (6 weeks to get) and for another detail notes it's very labor intensive and that virtually the same look can be achieved a lot cheaper via routing and two pieces of trim vs. glue and four pieces of trim per the detail. It's best to rely on all the expertise available to you which will still include that of the architect while the house is going up.
One word of caution; You charactorize the house as "really simple" but being simple visually and being simple to construct are not the same. Your house may very well be very complicated in terms of constructing it. I'm thinking of Meis' Farnsworth House here. One of the most complicated residential construction processes because of it's visual simplicity. Nothing wrong with that, just be prepared.
Finally, I admire your outlook; it's in the journey where the reward lies. I suggest reading "House" by Tracy Kidder.
It looks like you are getting more interest here in a seperate thread. The best of luck and keep us posted. I'd love to see photos. Any of a model or drawings?
Runnerguy
Edited 1/6/2008 7:14 am ET by runnerguy
Thanks for your thoughtful response.I will ask the architect about posting drawings. I am not sure how he is about these things. We have a model and photos as well.I agree completely with you, and you got it by the way, about simple design vs. simple construction. I would say that the construction is mot simple from the several houses we have been in. The design is simple, the execution therefore has a high demand because the details are so critical. (for instance, in one home, interior and exterior valence windows, upper level cabinets, millwork all at the same level with the same upper and lower reveals . . . .. if it's out even a bit, you can't help but see it). So you've pegged that issue. I can say, thankfully that the 4 builders who are shortlisted seem genuinely interested in the house as an idea. It is a way to do things differently in an area beset with Ski Chalet knockoffs, faux old farmhouses and French Chateaus, and suburban McM/s in the middle of farm land. So, we are fortunate in that regard. And given that these fellows are all in the area, they know that the product speaks now and for a long rime about them.
I am not a pro builder, but have built a few architect-designed homes. Highly detailed, thirty five pages of drawings, curves, unusual trim schemes, high-tech lighting, built-in stuff in every room, and more.
The last one I did was the most complex of the lot. A design by architect and author Sarah Susanka, I built a copy for a client of the original prototype home, which had been built in Stowe, VT.
The prototype was built by a GC who was invited to bid by the architect, and he was one of three who qualified as capable of delivering the intended final product. It was bid and executed per a lump sum firm priced bid, and the job required two change orders of little significance.
My experience was the same, lump sum firm priced bid with three (not two) change orders, all pretty minor, one being the wrapup for the difference between allowances for tile, plumbingware, and appliances, versus actual chosen materials and products.
My point is that no matter how complex the job might seem, there is a way to get it to a lump sum job. With your time outlook, you should work as hard as you can with the architect to finalize construction drawings and details, do specifications, and firm up as many choices of things like species, finish, floor finishes, lighting, windows, etc., then go on to execute the job.
IMHO, the only folks that can afford to go into the wilderness of cost-plus housebuilding, are those who are so foolish to begin, they do it with only half a job planned, or the very wealthy, for whom a million dollar (plug in your own number) house job is an insignificant piece of their net worth.
Just a further note as I've been here at my desk.You've asked a powerful question - why did we choose this architect?I've been thining of an answer and I will try to articulate it clearly. My partner and I have been looking at concepts for a house since we purchased the property 3 years ago. We had a general idea of how we wanted to live (which is very different from the urban 1880 victorian setting that we live in now). Form had to follow function, the structure had to fit with the local environment, it had to reflect the agricultural structural vernacular of Southwestern Ontario, it had to be complimentary environmentally, it had to be very low maintenace and be primarily on one level. These were our starting points as best we could articulate them.So we started looking at structures. WE looked at many houses and institutional buildings and we quickly came to know that we likeda few things - modern, clean, no unnecessary details, speaking architecture rather than speaking finishes. And we consistently found ourselves looking at one firm's homes, without knowing at first that the firm had designed them. So a cold email later outlining our starting points was followed by a series of phone conversations and a get to know you meeting in person and we knew that we had the right person - he got us and he got our vision. We have been through a real exploration of design ideas and we have learned alot - as we think has the architect. We now have a plan that we can see ourselves living in and being in. We are really excited and we are scared ****less at the same time. But it is the project of our lives. I know that sounds crazy but for us it is true.So that's our story about the first part of the journey. We've been to the firm, they've been here and it has been the one of the most invigorating experiences of my adult life. I hope this helps.
That post reads like an architects dream client."Structural vernacular" "Form follow function" "speaking architecture rather than speaking finishes" Zappa once said "Writing about music is like dancing about architecture"I think writing about architecture is like dancing about architecture.
Well, I don't know if you think the post was good or bad but I'll go with good. I know the terms are "architecturalese" but how else can you say these things in a consise wayForm follows function might equal - the space has to work to do what it is asked to do and be neither too little or too large, too awkward or difficult. There can be no spaces that don't have function and where practical a space should do more that one job equally well.Local agricultural vernacular of SW ontario - the designs should recall or echo the design of farm buildings of SW Ontario at the turn of the century without being pandering reproductions and without appearing cheesey. Someone who looks at the building when finished might first say "aha" and then say "I know exactly what that references"Speaking architecture rather than speaking finishes = let's have adesign where the architecture is first and foremost, and everything else serves the need to have the architecture "talk". So maybe the way to "talk" is to use less high finish wood (reminiscent of the inside of a barn) and use it is a higher grade millwork way. Or instead of traditional timberframe wood construction use steel with a simplified Queen bent structure. The last is one of my biggest beefs aboout current design and what buyers find attractive/desirable - a kitchen for example becomes about crown molding, stainless steel appliances, granite countertops, and high grade cabinets - and the design might be completely wrong but we got all of the other things right. So the components look good and you can't use the space. But that's my personal bias.So, I'm sorry for the architecturalese if it bugged you. I will say that they are our terms, we havn't co-opted them so if they are offensive, the offense is mine.
Edited 1/6/2008 5:02 pm ET by MarkMacLeod
"The last is one of my biggest beefs aboout current design and what buyers find attractive/desirable - a kitchen for example becomes about crown molding, stainless steel appliances, granite countertops, and high grade cabinets - and the design might be completely wrong but we got all of the other things right. So the components look good and you can't use the space. But that's my personal bias."
Yeah, and while we're at it let's set the ceiling height in the family room to, say 25', maybe more. Boy, I'm really going to feel comfortable on Sunday morning sitting there with the paper sipping my coffee enclosed with what feels like a Hilton Hotel lobby.
Runnerguy
I like Hotel Lobbys. I don' know if I like my great room to be 25' high. Well, yeah, I liked it, I didn't like the acoustics. Bob's next test date: 12/10/07
Not to get the thread sidetracked here but I think Mark said it well.
I'm a believer that successful design is not about creating objects it's about creating relationships. The reference to the local farm architectural forms should say it all.
Amazingly, even most designers don't understand the critical importance of thinking in terms of creating relationships as opposed to thinking in terms of creating objects. For example, if I think of a window as being a hole in the wall to let light in, that's all that window will likely ever become. If I think of the window in terms of the inside/outside relationship, the relation to the street, etc. the window has the potential of becoming so much more. The reason so many buildings fail as they're designed being thought of as objects as opposed to a creation of relationships (McMansions for example).
Is this theory?? Sure it is but we've all been in buildings (or on streets for that matter) that work and been in or on others that don't. The reason for the former is all the relationships work resulting in something us humans "feel good about". Can't really be defined, after all that's why it's theory but that doesn't preclude what we all have experienced in good design.
Runnerguy
Edited 1/6/2008 5:35 pm ET by runnerguy
Edited 1/6/2008 5:55 pm ET by runnerguy
100% agreed. But I find that people who understand this describe it as you did rather than the cliched architectural-ese of the OP.