GC bid summarized vs line item detail - is this normal?

spartans99February 19, 2014

We have been making significant progress in our kitchen reno plans and decisions related to material selections. We have our layout nailed down, a custom cabinet maker lined up, and now we are into the bulk of everything else related to general contractor items (demo, electrical, plumbing, etc.). We have talked with and received bids from 3 GC's. The first GC is way too high and we know it is too outlandish based on previous remodel projects. Plus, he missed a few things we asked to be included. The second GC is a little on the low side and again, missed including some key items.

The 3rd bid is in the middle and we have been extremely impressed with their professionalism, attention to detail, level of detail in the estimate, and references.

So here is the problem...we received line item costs in the bids of the 1st and 2nd GC, however, with the 3rd GC, he only provides the total cost of the project. Let me be clear that he has also included a VERY detailed Statement of Work that has the line items spelled out in terms of what is included. This is the most detailed explanation of what is included in the project of any of the GC's. However, because he isn't giving us line item pricing, it is making it very hard to understand how competitive he is for various items. If he is too overpriced in certain areas, I would like to source those elsewhere / possibly remove them from the scope of work. To get to that point, I now find myself asking him, "if we decide we don't want x, how much credit do we get back?".

Even though I really, really like the GC and his subs, my gut is not feeling comfortable at all on the pricing front. I feel like we are playing games here and that isn't good for any of us.

Is this normal?

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Did you ask him for a bid based on plans and specifications? I assume, therefore, that that's what he gave you - a bid based on those plans and specs. You can ask for line item detail, but the bid includes everything you asked for, including his profit on those items, so he may not be inclined to have you "source things elsewhere" - everything you source elsewhere means less profit to him.

    Bookmark   February 19, 2014 at 7:49PM
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It is not uncommon. One reason may have to do with why he prices where he does.
Let's say the expensive guy uses either a pricing program or a spreadsheet. Pops in items and comes up with a total. That's it, that is the price, nice and itemized.
Other plugs it in, then considers the scope of the job, looks at logistics, overlaps, talks with his guys, relates it to past jobs, then massages the price. You get a clear itemized scope but not itemized prices. Want to pull out this or that and play games, you lose the massage.

May not be what is going on, but it is a common approach for outfits that are not slaves to a pricing program.
Kind of like mechanics. Go to the dealer and the book says this repair takes 4 hours, so that is the bill. Go to another place and it takes them 3.

    Bookmark   February 19, 2014 at 7:56PM
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A GC we have used for past projects does their bids in the way you described: Extremely detailed scope of work document but no line item costs.

For a recent large project, I wanted them to bid but this time, wanted line item costs so that I could compare with our other three bids. It isn't the way they usually do things, but they obliged. I even showed them the format (no numbers) of one of the other bids, and explained why I found the information to be so helpful.

I can't tell from your post if you actually asked them to do this for you, and they said "no", or maybe you didn't ask? They would be nuts to be out of the running over some paperwork--definitely ask!

    Bookmark   February 19, 2014 at 7:58PM
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I don't know if is common, but the guy who did our bathroom did it that way. Detailed scope of work, bottom line price. He did a great job and came in at the bid. I think he prices that way in part to avoid negotiating over every single item and to leave himself some wriggle room within the total price. If he comes in low on the soapstone because he found a remanant I approve of that makes up for ending up higher than expected on the tile. I liked the guy and he had solid recommendations from multiple people and I was able to see some of his work two or three years down the road. I felt like all of that was more important to me than an item by item bid.

    Bookmark   February 19, 2014 at 8:24PM
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Sophie Wheeler

What you want is outside of how most good GC's operate. He uses his subs for a reason. They do good work, and keep to his timeline. Why should he use someone he has never worked with or whose quality he isn'sure about. When you get a GC bid, you're getting a package deal, not a deli sandwich, hold the mustard I brought my own. It's a big reason you choose to go with a GC. It's all about his contats that he has developed trust with.

If you want to start picking apart his quote, first of all, it's insulting to him. He brought you his best price using his best guys. You are basically saying that you know better than him, and you really do only care about price over quality.

Maybe you'd prefer to GC the project yourself. Because the minute YOU start selecti g subs, yu become the responsible party for them and how they interact qnd affect the schedule of your sub, the majority contractor. Because he's no longer the GC, and no longer responsible for the whole project.

Now, having said that, if you've used a contractor before for a specific project, like refinishing floors, and you'd like to use them on this job,you can discuss doing that with the GC. ''Hey Bob, we'used Lucky Star Floors before in our last house, what do you think about working with them on this project? I'm sure that you'd want to check them out, but we were very pleased with their quality.'' Bob is always on the lookout for new connections, and a recommendation from a previous customer is a good way to find those new connections.

1 of 3 things will happen. Bob will check out the guy and all will be well. He's licensed and insured and can produce lots of other references. So Bob uses him for this job and says thanks for that lead on a great new sub. Or Bob checks him out, and something isn't quite right. Maybe his insurance has expired, or he looks at his work and with his professional eye sees that his guy does better work even though he costs more. So,isn't gonna tell you that he thinks the guy is a hack. He just tells you that he prefers to work with his guy because of the longstanding relationship and timeliness. The 3rd choice is that the guy does perfect work, has all of the papers, and Bob still prefers to use his guy. So he tells you thesame thing as if he were a hack. He prefers to use his guy.

You have to decide if having your way with hiring Lucky Star on your own outside of his supervision and control is worth the risk. And he has to decide if that hassle is worth giving up the whole job, or increasing the price if your guy delays things and interferes with his schedule. Time is money, and you can't expect that to not happen if your cheaper guy is slower, or screws it up and has a do over. You just cost the GC the ability to move on to another job when he said he could.

    Bookmark   February 19, 2014 at 8:47PM
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Thank you all for your feedback! I guess I was just thrown off by the summary level bid. All of your points are well noted and I greatly appreciate the input and items I should be considering.

    Bookmark   February 19, 2014 at 9:00PM
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I'll add this ... even if a bid includes line-by-line prices, those prices are often discounted given the entire scope of the job. Because they are already there and set up on the job, they can afford to do certain things for less due in part to the NUMBER of things they are doing. Start deleting things and it really cuts into their profit. This could happen ... the customer asks for a line by line price, then they will select only one or two small things out of the proposal and say that's all they want to do "right now", but those small things are often the things that are discounted the most. The customer doesn't understand that the total price is a "package deal."

    Bookmark   February 19, 2014 at 9:21PM
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Again, hollysprings has taken the words right out of my mouth.

    Bookmark   February 20, 2014 at 9:21AM
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" a deli sandwich, hold the mustard I brought my own. "
saves me how much?

    Bookmark   February 20, 2014 at 11:07AM
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In my case, our GC gave very high-level line items (about 8 or so) for the whole remodel. He ended up making a lot of money on some items, and losing money on others. These are estimates because you never know until you open up the walls how much things will really cost.

If I cherry-picked the ones I liked, he would have lost money overall and I wouldn't have had the benefit of having a real GC own the whole project. Not worth it for either party.

    Bookmark   February 20, 2014 at 11:26AM
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Agree with calumin. If you nickel and dime GC, as I call it, both parties will wind up unhappy. In return, they will nickel and dime you for everything. An important lesson I learned 20 yrs ago. Even if they take the job under those terms, you could be left holding the bag. Whole idea is for a win-win situation.

I went with a very fair summary bid and have been more than pleased so far. There were things, like cab install, I knew I would not have GC involved with, but left dollars as is. There were surprises at the demo stage, but never heard a word from GC about more money. Instead of taking a short cut, he took the longer and more expensive route. But I don't like to be nickel and dimed to death. Again, it's about a win-win.

    Bookmark   February 20, 2014 at 12:30PM
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Great comments here!

I'll just add that you already got 3 estimates and his bid is inline with the other two. You could probably save some money, but is it worth not getting the 'package deal' and the peace of mind that comes with that?

Start hiring your own people for this and that, then all the subs will argue over things, not have as much communication, too many chiefs, bad-mouthing each other....drama, drama, drama! Also, get a scratch on your wood floors? Let the finger pointing begin. If you have ONE GC in charge, he will ultimately have to deal with it. This is why people pay the premium for a GC to oversee their projects.

    Bookmark   February 20, 2014 at 1:25PM
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Thanks again for the feedback. FWIW - I was not setting out to nickel and dime the GC and I understand how my initial post would be interpreted in that way. I agree it has to be a win win and I expected to pay a premium to use a GC. In the past I have typically encountered about a 20% total increase in renos when I use a GC (10% profit / 10% overhead). But with the total price this GC is giving me, I need more transparency on the quality of products being used as well. For example, I asked for direct wire LED under cabinet lighting. While the spec shows that under cabinet lighting is included, I asked for the detail of what he chose and it is a completely different type of installation that has a DC power pack. So I guess at the end of the day, my frustrating is lying with the very detailed product selections that GC may be making to keep his cost competitive, but ultimately it may not be what I have asked for. Bottom line - I need to make sure the scope is 100% detailed with what I expect to have included so the price is accurately reflecting those products.

    Bookmark   February 20, 2014 at 1:55PM
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I can't imagine letting a GC pick out anything other than general materials like plywood and drywall.

    Bookmark   February 20, 2014 at 2:18PM
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For materials that he provides, such as lighting, ask him for your "allowances" for those materials. Tell him that you would like to select those items yourself. I do this a lot with my clients. In the bidding process, I don't always know every detail of what they want. So, for example, on my estimate, I'll have a "backsplash allowance" of $300 for materials only (not labor) or $1250 for lighting (cans, pendants, undercabinet...etc). Then they can select what they want. If the price goes up or down, I adjust the invoice to show the price, not the allowance.

    Bookmark   February 20, 2014 at 2:37PM
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Ask him to detail the specifications for what he has included -- the price doesn't matter unless he has spec'd something you're not happy with, you change the spec, and the price goes up. Ex. He spec'd builder-grade cabinets, and you wanted Crystal or Plain & Fancy.

    Bookmark   February 20, 2014 at 4:36PM
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Ah yes, sounds like you do need more detail. In the scope of work my bathroom contractor provided, he specified things like soapstone countertop, custom vanity with dimensions, etc. Some items were not specified like the lighting because I didn't have any particular choices made that early in the game. But all the things that were important to me were listed.

    Bookmark   February 20, 2014 at 5:12PM
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I had a similar contract with my GC: a summary that detailed the aspects of the job (eg, install 4 ceiling cans, customer to provide fixtures, install cabinets, customer to provide cabinets, install gfci outlets, etc) and a total for the scope of work. My expectation was that if the scope stated that he would install something, that meant he would be providing any items needed to do that.

And some things I didn't research thinking that he would just know what to do-- like placement of the relocated phone jack and associated power outlet in a way that would actually let me put the phone there and look nice.

So, the only difficulties with that contract that I ran into involved a lack of detail in some aspects: the quality of the drywall sub, issues with fit and finish/ quality of material used (so some things I should have thought more about and specified in advance), only one GFCI installed. Since I ended up refinishing the found pine floor (at my expense) instead of installing the engineered, he found reasons to not discount for the work not done -- like, they had to buy a $19 fitting for the frig water line installation, and a line for the gas stove install, and screws for the pulls -- and that supposedly made up for not installing a floor.

I understand expecting to get so much for a job but he was saved a day of labor too. It wasn't enough to sour me on the guy, though. It wasn't worth fussing about in the end, to me. To someone with tighter resources it surely might have been. But, it couldn't have been planned ahead for.

Some of the issues (and they really aren't major, in the total scheme I feel) kind of are his crew nickel and diming me -- Claiming something wasn't mentioned in the scope of work (it was), not wanting to finish this, not wanting to fix that, wanting to be done and on to the next job and have no further labor expense on mine. Problems I think can happen with any kind of contract.
So, my advice is to discuss any detail that you can think of and make sure it is clear who is providing what, to what quality (like in my case-- style of trim around windows, lack of insulation behind the over-stove exhaust fan, the exact number of GFCIs and where, new location of phone line).

    Bookmark   February 20, 2014 at 7:59PM
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I'm in a similar situation now, and it's reassuring to read through these responses to get a sense of what is common practice for a GC, and what is not.

Right now, I've got 3 bids--one that was extremely detailed; one more generalized but still with grouped items and allowances priced out; and one that is just, literally, a price. It turns out that, of the three GCs, I like the work of the last one the best, and I've been very comfortable speaking with him, but just getting that price alone leaves me feeling a bit nervous.

My issue is not so much that I need to know the cost of all of the line items, but I do want a comprehensive list of what tasks/items the price includes (i.e., Statement of Work), and it would be helpful to have the allowances for appliances, etc. I've given him *my* list of what I expect it includes, and he agreed and clarified other items that we'd discussed at various times, but just so we can ensure we're on the same page, I'd really like to get that comprehensive listing from him before hiring him. I've asked him for that information, and am in the process of contacting his former client references, so I'm hopeful that we can work it out.

It sounds like with your Statement of Work and overall price, you're at least in a slightly more transparent situation--good luck!

    Bookmark   February 20, 2014 at 8:22PM
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" ... but just so we can ensure we're on the same page, I'd really like to get that comprehensive listing from him before hiring him."

Tell him just that ... put it all in writing if he wants the job. Getting the "price alone" SHOULD make you feel nervous. The last thing you want is to be arguing about this stuff down the road. A clearly written scope of work and contract that is fair to both parties will do much to alleviate any disagreements later. Don't cave ... you'll live to regret it. If he can't be bothered to put what he proposes to do for you in writing, I wouldn't hold out much hope that he'd be that gung ho when it comes to doing the actual work.

    Bookmark   February 20, 2014 at 9:39PM
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Thanks, Jellytoast. I agree--the alternatives were to have a good discussion with him and have him clarify everything in writing, or hire someone else. Thankfully, he was very responsive to my questions and has given me exactly what I requested, so I'm feeling much more comfortable now.

Particularly, in looking at the difference in allowances between his quote and another one I got, I can see that the price of the work is very similar to that of my second choice, which gives me more confidence in his quote. Now I'm off to check his references, and if all checks out...here we go!

    Bookmark   February 22, 2014 at 12:29PM
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Great outcome - hope it works out!

    Bookmark   February 22, 2014 at 12:31PM
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You can have transparency without resorting to a nickel-and-dime process. I think OP made it clear it was the former he/she was seeking.

But, in receiving bids in the past, I appreciated that providing them takes significant time on the GC's part--I suspect several hours, maybe, especially if they're not using a pricing program. So, without a signature on the dotted line, perhaps this GC takes the bid only so far without itemizing, unless the customer asks for it. If the customer requests more information about pricing, then the GC should oblige. If you don't ask...

So, ask. And asking for details about pricing doesn't constitute some sort of breach of etiquette, for goodness sake. This is an investment, and you want your money used in the best way possible for you, without having to tiptoe around a GC's method of pricing. If you were to take the money you're going to spend on this remodel and invest it with a brokerage firm, would you refrain from asking about fees and associated costs for fear of insulting them?

I've never come across a GC whose business acumen was so sensitive that asking fair questions about pricing and expecting transparency would impact the quality of his/her work. If that's the case, they should move on to the next bid.

    Bookmark   February 22, 2014 at 1:03PM
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