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Contractor bid etiquette

annkathryn
12 years ago

I'm having general contractors bid on a major remodel. The work involves every trade. We'll add 450 square feet to the house and convert a 2-bedroom, 1.5-bath house to 3 bedrooms, 3 baths. We're also taking the kitchen down to the studs, bumping it out a bit, and adding new cabinets & appliances. New windows, interior doors, new electrical, plumbing, gas line, etc, etc. A big job.

We've been working with a designer and have very detailed plans that are going to the city today, along with the structural engineer's report. The plans were about 90% done (missing final structural engineering) 4 weeks ago. At that point my designer printed up 5 copies and posted high-resolution PDFs online.

It's been very difficult to get contractors to go to the house to bid. I was in touch with 5 contractors starting about 2 months ago and sent them all an overview of the scope of work. All said they were interested. I gave them all 3 weeks from the date the plans were 90% complete as the bid deadline. That's next Monday. I've been available to walk them through the house nearly every day since.

Contractor 1: saw the house 2 weeks ago, came back with all his subs last week, said he needed an extension of the bid deadline to next Friday. I said fine and gave the other 4 contractors the same extension.

Contractor 2: saw the house this week, said he had been working towards the original bid deadline of next Monday but appreciated the extra time and will get the bid to me Wed/Thurs.

Contractor 3: walked through the plans with my husband earlier this week, saw the house today, said he couldn't get the bid in by next Friday and would need another week.

Contractor 4: hasn't seen the house, wants to see it next week and needs another week to get the bid together (a week from Friday)

Contractor 5: picked up the plans from my house 2 weeks ago, says he still wants to bid but hasn't answered my emails regarding setting up the walkthough time.

Contractors 1 and 2 seem extremely competent, were referred to my by my designer and have built/renovated houses designed by him for the past 20 years. Contractor 1 is local and this is a high-cost area, so I'm expecting a high bid. Contractor 2 is from farther away and I'm expecting a slightly lower bid. Contractor 3 complained about the short timeframe and didn't seem to be very good with details. He also didn't listen very well. Contractor 4 is a big design/build firm referred by a friend. Contractor 5 has done kitchen & bath remodels for me; he does good work but is terrible at communication. He's also likely to be the low bid.

We've learned a lot during the contractor walkthroughs and have continued to refine the plans. I'll be communicating all refinements to all contractors prior to the bid deadline.

My husband and I would be happy to have either contractor 1 or 2 do the work, but we're concerned about the cost of their bids. I do understand that putting a bid together is a huge amount of work. Contractor's 3 whining about just getting the plans this week completely turned me off him - it's not my fault he couldn't manage to pick them up earlier like everyone else. I'd like to cut him loose. DH says let him go ahead and bid, it might give us an advantage with the others. Contractor 4 is an unknown, and I'm getting tired of Contractor's 5 lack of communication.

At what point do you tell contractors you no longer want them to bid? Is it better to get 3-4 good bids so we know for sure we've got the lowest and best bid?

Comments (18)

  • live_wire_oak
    12 years ago
    last modified: 9 years ago

    You are setting yourself up to fail awfully early in the process. During the busy season, I'd expect a contractor to take 4-6 weeks to complete a bid package for a reno of your scale. 3 weeks is not nearly enough time. Trying to rush the process will lead to a lot of frustration on your part, as well as possibly losing out on a quality worker. Quality workers are busy for a reason and often do not employ additional staff to be able to run out and pick up plans etc.

    You can have it fast. You can have it cheap. You can have high quality. Pick two. You can't have all three. And being deadline focused means that the project will be pretty expensive, or pretty badly done. Get rid of the want it quick mentality and focus on quality FIRST. Then maybe you can find a contractor that won't break the bank.

  • annkathryn
    Original Author
    12 years ago
    last modified: 9 years ago

    This was the timeline I used on a similar remodel with the same designer about 10 years, but perhaps times have changed? I do appreciate that getting bids from subs takes a lot of coordination on the GC's part.

    I'm all about giving lots of lead time and don't want to rush the process. I assumed that by contacting these contractors 2 months ahead of time that this would give them a heads up so they could work the bid into their schedule and that of their subs.

    We can't begin demolition for another month anyway, so there's no huge rush. We wanted to start working with our chosen GC well ahead of time so that key materials could either be in place or on order and so he could hit the ground running as soon as the previous owner is out of the house.

    In a way this is a test of the GC's ability to communicate: if turning a bid around in 3 weeks wasn't possible, why not let me know upfront?

    My original question was more about when to notify a contractor that he's out of the running - prior to receiving his bid, or after?

  • annkathryn
    Original Author
    12 years ago
    last modified: 9 years ago

    My designer did fairly complete structural drawings as well, but the reason I said the plans were 90% complete rather than 100% was that they needed to be reviewed and stamped by the structural engineer for submission to the city. I don't think very much changed in the last 10%, but without the official engineering stamp they can't be considered complete. Since contractors #1 and #2 have worked with my designer for so many years, they were comfortable with the 90% drawings. All the other pages of the plan (demolition, construction, electrical, HVAC, materials list, etc, 16 pages total) were 90% complete and online for everyone to review a 5 weeks ahead of the bid deadline. They were online and 100% complete 3 weeks ahead of the bid deadline, which is when we had the plans printed and set the original deadline.

    I'm not in a hurry, I'd rather give these guys time to understand the scope of work ahead of time rather than deal with change orders later.

    I think contractor #5 is going to miss the deadline...maybe #3 will too.

  • lannie59
    12 years ago
    last modified: 9 years ago

    Pick 3 contractors to bid the remodel. Go by recommendations from friends, architects, or even supply houses. If 3 bids come in between 5-10% of each other then you will have an idea of what the job will cost. If 2 come close and 1 is either high or low then you can get down to 2 bids. Hopefully you gave your designer a budget and told him to stay within it so when the bids come in you are not shocked. Not having a final approved plan and the fact that the house is still occupied raises problems for accurate bids at this time. If you want no surprises every detail must be specified. Type of wood, every fixture, paint color,
    and even the porta- potti need to be included. Most plans seem complete, but contractors bid them completely different because the information they are presented with is incomplete. Low and best does not exist. In today's economy some contractors bid low and everything not shown is an extra at time and material. Pick quality and local if possible. You want service with mechanical trades that are in your area if any trouble ever happens. These are just my opinions so good luck with your project.

  • renovator8
    12 years ago
    last modified: 9 years ago

    California is pretty aggressive about suspending a structural engineer's license for stamping the work of others ("hot stamping").

    Distributing structural design work by a designer that requires a CA license to many contractors and then submitting the same work to the building department with an engineer's stamp on it can put the engineer's license at risk and subject the designer to a fine for practicing engineering without a license.

    If the engineer knows you are doing this he/she might insist on redrawing the work in his/her office under his/her "direct supervision" as required by state law.

  • Billl
    12 years ago
    last modified: 9 years ago

    "At what point do you tell contractors you no longer want them to bid? Is it better to get 3-4 good bids so we know for sure we've got the lowest and best bid?"

    1) If you don't want them to bid, just tell them. It is unprofessional to have them waste their time if you have already made up your mind not to use them.

    2) The lowest and best bid are often not the same. There will be changes, and delays, and overages etc. You need to pick someone who you think you can work with through those ups and downs.

    Overall, I think you need to relax. It is great to be organized up front, but you need to remember that most of the best tradespeople are in high demand. If someone says it will take an extra week to get a bid in and you know they do great work, give them the week.

  • annkathryn
    Original Author
    12 years ago
    last modified: 9 years ago

    The structural engineering work was scheduled to take 3 weeks. My designer's normal mode of operation is to create an initial foundation plan. He's not pretending to be a structural engineer and I don't want to give the impression that corners were cut in that area. The structural engineer did a complete review, all required calculations, and updated the plan where appropriate. He created detailed drawings for walls and foundation. I haven't looked at those pages in detail yet but I'm comfortable that the process was followed such that the city will have all the information it needs to review the plans. The engineer and designer, along with contractors 1 & 2, have worked together for decades in a city known to have a rigorous design review and permit process.

    Hopefully you gave your designer a budget and told him to stay within it so when the bids come in you are not shocked.

    We gave our designer a mission statement and a detailed list of requirements. He managed to work in everything we wanted despite the severe floor area ratio limitations due to the small lot size. Some compromises were made, but overall we got what we wanted and are happy with the plan. We've done a bottom-up and top-down estimation of the cost.

    We're prepared to be shocked anyway, and have some additional compromises we can make. One of those is to forgo custom cabinets and use Ikea boxes with custom doors instead, which we've priced out. Part of the reason for setting the bid deadline to the date we did was to be able to take advantage of the Ikea 20% off sale. If the custom cabinet bid comes in at 2x or 3x our Ikea plan, we'll buy Ikea boxes and order quartz counters before the sale ends this month.

    If you want no surprises every detail must be specified. Type of wood, every fixture, paint color,

    Check. All materials are indicated on the plan. However, I'm sure something will pop up that's been overlooked. We'll roll with it.

    Overall, I think you need to relax

    You're right! This is going to be at least 8 months of work, plenty of time to get stressed out in the future! Taking a chill pill.

  • annkathryn
    Original Author
    11 years ago
    last modified: 9 years ago

    As an update, we now have 4 bids.

    Contractor 1: Bid was $355K, said it would take 6 months to complete.
    Contractor 2: Bid was $319K, said it would take 8 months to complete
    Contractor 3: dropped out of the bidding
    Contractor 4: Bid was $377K, no time estimate given
    Contractor 5: Initial bid submitted without walking through the house was $201K/3 months. We pointed out everything he'd missed, he came to the house with 3 subs (electrical, plumbing and HVAC) and resubmitted a bid of $268K, no time estimate given.

    So we're comparing the 2 low bids. Contractor 2 has a line item for project management at 10% of the total cost ($31K) while Contractor 5 does not have a line item for project management and will do much of the framing/foundation work himself. His painting line item seems a bit low, and his demolition line item seems a bit high. Still, there's a $50K difference between the 2 lowest bids.

    The reason we're not jumping on the lowest bid is because we've used Contractor 5 before (kitchen, master bath and hall bath). He does good work and he's the contractor of choice for 3 friends of mine, who call his style "old school". He's also renovated many of the houses in the neighborhood where I'm currently renting; we saw one a couple of weeks ago, and are going to stop by a second next week. The downside to this guy is terrible communication skills; he doesn't respond to emails or voicemail. On the plus side, he doesn't nickle & dime changes to scope, and he fixes issues that pop up long after the job is done (after much effort to reach him).

    I liked Contractor 2 and he's done a lot of work in my town. I think he'd do a good job as well.

    My thinking is that for a savings of $50K, I can live with some of Contractor 5's quirks.

    Anything else I should consider?

  • User
    11 years ago
    last modified: 9 years ago

    I'd bet that his lack of communication skills also extends to poor bidding skills. 50K in "savings" is likely to turn into 70K in forgotten charges or upgrades due to him bidding builders grade materials.

  • annkathryn
    Original Author
    11 years ago
    last modified: 9 years ago

    hollysprings that's a good point and prompted me to go back and compare bids vs actuals on the 2 bathrooms and kitchen in my previous house. These jobs were all done at different times, with the kitchen being the smallest $$ amount to the contractor and the master bath being the largest. I found the written contract for the kitchen ($2770) and hall bath ($18,442), which matched my payments. I don't recall any additional charges for the master bath, but my memory's a bit hazy on that. I paid for lots of things - appliances, granite, plumbing & light fixtures, vanities and painting - outside of the contract.

    Builder grade materials - are you thinking of finishes or the non-visible things like framing/concrete/drywall? We've got allowances for finishes and have gotten our own prices for everything except the tile (there's going to be a lot) and the oak & bamboo floors. DH is working on a spreadsheet to normalize all the allowances.

  • GreenDesigns
    11 years ago
    last modified: 9 years ago

    In a normal bid process, the lowest bid should be looked at sure, but it most likely should be tossed, especially if the other bids clustered significantly higher than the low bid, which is your case. It's a red flag, and the only reason I would even be talking with this guy is that you've used him before. Examine the scope of your previous projects as to complexity and time. One bathroom project doesn't equal the skill to manage an almost whole home renovation. I'm sure that you have received copies of his current license and insurance and that he is someone who is above board and pulls all of the required permits? If that's not the case, then that would put him out of the running right there.

    Also, with allowances in place, you have to be much more specific in your description of the project labor in order to receive an accurate bid. How was the tile labor bid out? There is a world of difference between, "8x10 bath, tile on 5 walls", vs. "8x10 bath, natural stone tile on floor on diagonal with decorative medallion centered, shower herringbone natural stone plus 4 different accent tiles in pattern". That's a 8K difference in the amount of work needed, not only for the install labor, but the materials and procedures that are the foundation of the actual tile install itself. Natural stone requires a subfloor that is twice as stiff as does ceramic, and that all has to be addressed before a single tile is laid.

    The allowances are important, not only for your budget, but for the contractor to understand the level of the job that he's bidding on and all of the labor that will go into producing it. If you get your numbers based on a more general description of the project, then your numbers will change upwards once the actual complexity is nailed down.

    I would bet he's bidding the cheapest HVAC solution that can be found, plus not taking into account upgrading the hot water production and delivery system, as well as using cheap insulation, siding, and roofing in his bid. The pretty stuff like tile is important, but the boring stuff that goes behind the walls and makes your home a comfortable place to live are even more important. You need to really compare the exact products that were specified for those non-sexy areas.

    I would really like to say that a low bid from a contractor that you've used before sounds like a great deal and to jump on it, but you having to chase him down, and correct his information does not give me any warm and fuzzies here. It rings all kinds of alarm bells when coupled with a price that is so much lower than the other bids. I think if you go with this guy, you will not only end up paying the difference in money, but you will also pay a price in your stress level and home inconvenience. You will have to act as the initiator in any communications and will never know if the project is on schedule or running smoothly unless you stay on top of it and make it your business to supervise the supervisor here.

    Contractor #2 sounds like a more reasonable bid, and the time line is certainly more realistic given the description of the project. It might not even be long enough if you encounter structural issues or supply backorders. 3 months is blowing smoke to tell you what you want to hear.

  • annkathryn
    Original Author
    11 years ago
    last modified: 9 years ago

    GreenDesigns thanks for your comments. I'm looking in more detail at bids 2 and 5 as a result. Contractor 2's bid shows totals for each line item, while Contractor 5's shows materials and labor broken out, then totaled.

    Both Contractors 2 and 5 are above board, are insured, won't start work without permits (plans will come back from the city w/comments next week, permits by end of May if all goes well).

    The bathroom drawings are detailed enough to give square footage of the tiled area, but we didn't give specific details about tile. Instructions were more general such as "12x12 ceramic on floor" and "stone tiles on walls with niche and corner bench as indicated" etc. I can see how more details in that area would be prudent. Contractor 2 has a tile install number of $12K assuming $5/square foot for tile. Contractor 5 shows $15K for tile install assuming $4/square foot ($3500 materials and $11,750 labor).

    HVAC efficiency not specified by Contractor 2, specified as two 95% efficient furnaces by Contractor 5. Both were instructed to wire for air conditioning; A/C not included in bids, we'll probably add it as our first change order.

    We requested that insulation for all interior walls that are opened up be included. Contractor 2 didn't specify type. Here's what Contractor 5 bid:

    Unfaced R-19 6-1/4" blanket insulation
    Kraftback R-30 10" blanket insulation
    Unfaced R-13 3 1/2" blanket insulation

    Is that cheap insulation?

    Stucco was bid by both as "match existing". Roof was bid by Contractor 2 as "match existing" and by Contractor 5 as Asphalt/fiberglass shingle 375lb 4-6/12.

    Is that cheap roofing material?

    Instructions for all bids on electric/gas/water were as follows:

    - New larger-diameter piping to supply additional gas for the additional gas appliances (attic furnace and on demand water heater).
    - Increase the diameter of the water pipe from the water meter at the street to the house; replace existing galvanized pipe with copper or PEX.
    - Upgrade from 100A to 200A service. Since the power drop is at the front of the house and the conduit from there to the present main panel is not big enough to carry the wire necessary for the increased current, move the main panel to the front left corner of the house, just below the current power drop.

    DH had long conversations with all plumbing subs about gas and all electrical subs about placement of the meter and the location of the subpanels (he's an electrical engineer). I'm assuming all the bids are apples-to-apples in these areas, but I'm leaving that all to DH.

    you will not only end up paying the difference in money, but you will also pay a price in your stress level and home inconvenience.

    Yes, that's my concern except for the home inconvenience part as we're not living in the house.

  • lazypup
    11 years ago
    last modified: 9 years ago

    While discussing bid etiquette that is a double edged sword. Most homeowners strain under the notion that the subs are all sitting around a shop waiting for the phone to ring so they can jump in the truck and come running like firemen.

    As a Plumber, and I am sure the other trades will tell you the same thing, if I expect to keep quality personel working for me, they have a right to expect a minimum of 40hrs every week. Typically to plumb a single family residence we will be on site three times throughout your build. Once to do the roughin, which includes running the house sewer from the municipal main or septic tank to the structure, running the water supply line, and any and all underslab piping that is necessary for your build (1 day)After the structure is dried in, we then come back and do the stackout, which includes all the pipes that will be above the slab but ultimately concealed in the walls,(again, 1 day) and when your house is nearly completed we come bach a third time and do the trim out, which includes setting the fixtures and final testing (again, 1 day).

    In order to make it all come together and keep my ppl working every day, I have to have a dozen or so residential & commercial jobs all going at the same time and if my ppl come to your site and find there is some type of delay because one of the other trades has not finished there task, or what is even more common, the homeowner has not yet finalized their choice of materials & fixtures I either have to send the crew to another job or send them home and pay them for the day.

    On top of that, I can not even attempt to quote a bid until I have copies of both the approved structure prints and the site plan so I can layout the DWV plan for the structure and workup the basic material costs. At this point it is a rough bid using contractor grade fixtures and listing an allowance, but we all know that once this goes back to the homeowner they will want upgrades on the fixtures, which again takes time.

    The bottom line, I will not even consider a bid unless I have a minimum of 60days lead time before construction begins.

    Now consider that the GC has to schedule all the subs so in order to workout his plan he/she will need another 14 to 30 days lead time.

  • annkathryn
    Original Author
    11 years ago
    last modified: 9 years ago

    lazypup thanks for your perspective. Are you saying that the rough-in plumbing takes a day, underslab piping takes a day, and trim out takes a day? My bids for plumbing are in the $15,000-$20,000 range. That's a pretty hefty daily rate!

    I'm being a little tongue-in-cheek because I know there's a lot more than 3 days of plumbing work involved in my remodel. But I do appreciate the scheduling difficulties you must face if you're trying to keep your employees working 40-hour-weeks on 1- or 2-day jobs at a shot. You must have really good scheduling software.

    What does DWV stand for?

    We've notified the 2 high bidders that they're out of the running. My DH is still crunching numbers on the 2 low bids. It's really hard to compare apples-to-apples when one bid has a number for "windows" and the other has windows broken out into materials and installation. Does the first "windows" number include installation, or is that part of the finish carpentry number, as it was in bid #1? DH is trying to puzzle all that out.

  • dseng
    11 years ago
    last modified: 9 years ago

    DWV = Drain, Waste and Vent - the pipes that take care of the used, unwanted, and smelly.

  • lazypup
    11 years ago
    last modified: 9 years ago

    Quote"Are you saying that the rough-in plumbing takes a day, underslab piping takes a day, and trim out takes a day? My bids for plumbing are in the $15,000-$20,000 range. That's a pretty hefty daily rate! "

    The main water line & house sewer line from the street to the structure plus the interior DWV & water distribution piping under slab are the "rough-in", and yes, the guys are alloted one day to finish that.

    After the house is dried in and interior walls framed they will return and do the "Stack-out" phase, which is the water lines & DWV lines which will be inside the walls, and here again, the crew is alloted one day to complete that. And when there is to be ABS or Fiberglass tub or showere enclosures they are also installed during the stackout.

    After the bathroom floors & walls are finished and the kitchen cabinets are in we return a third time to do the "Trim out", which is where we set the sinks, waterclosets and all final valves or trim, and this too is to be done in one day,

    And those schedules are the same whether its a remodel job or a whole house.

    So what you see is three days work, but don't think for one monent that all you get for your $20k is 3days.

    As soon as I get your prints & site plan I have to go to the municipal water & sewer providers to find out exactly where they will be installing the water & sewer taps, then I have to work out the entire water distribution and DWV layout for your job. That generally takes the better part of a day, then I have to go back over the prints and do a complete material workup, right down to the last pipe hanger, roll of solder and gas for the soldering torches, flux, pipe cleaner, glue etc. After I have the material list I have to contact my suppliers to get a confirmed price, so there is another day.

    I then have to order the material and as it is delivered to the shop we have to package and stage it for your job, so I have the overhead cost of that storage area plus the labor to handle it in the staging area.

    Now let us consider the cost of the crew. In addition to their wages, there is $600yr per man for drug tests, $4k per man for tuition for the apprenticeship training course at the local college, $90 per copy for the code books and every employee must have one, then there is workmans comp insurance, vacation time & paid holidays and individual safety equipment such as OSHA approved respirators (one for each man), hard hats, hearing protectors, gloves etc.

    Then we have 1ton 4x4 crew cab pickups with jobbers boxes for $65k each, a one ton dump with heavy equip. trailer $70K + $6K, a backhoe $95k, bobcat $90K mini-trackhoe $75k, ditch-witch trencher $120k and specialty tools such as the Rigid cordless PEX crimper for a mere $1600, oxy-acetylene tote weld torch $350, for brazing copper under slab, Then we have a small truck load of hand tools or cordless and cord type power tools that are supplied by the company plus a large portable generator and lights incase we have to work late into the night or we happen to be on a site where they don't have temporary power setup yet.

    Add to that the cost of the office & shop, secretary, bean counter, warehouseman, equipment maintenance and fuel, not to mention another $5k a year in licensing fees.

    Now don't get me wrong, I am not crying in the least, but if the final analysis out of your $20k if I get $300 for my pocket its a good day.

  • annkathryn
    Original Author
    11 years ago
    last modified: 9 years ago

    lazypup you've given me a new appreciation of of hard plumbers work and how much overhead you've got. Amazing that your margins are so thin.

    So, we have a winner. After much number-crunching, mulling, analyzing and listening to gut feel, we're going with Contractor 5, the one we've used in the past. We have 10 recent references, all are friends of mine or friends-of-friends. We also went back to his current job site and talked to the homeowner there. Everyone confirmed our own experience which is that he does high-quality work despite having communication challenges. He's also still the low bidder after accounting for differences in allowances, significantly lower than the next lowest bid.

    DH sat down with him and laid out some expectations. Contractor 5 is going to come up with a specific schedule for us to review before we sign the contract. We'll meet with him at a set time every Wednesday to discuss progress and concerns. He has a defined change order process. They won't start hammers, heavy equipment or power tools before 8:00AM (request from neighbor), etc, etc. Contractor 5 was totally fine with all of this. He also confirmed that he'll be using the same tile guy who did a great job on our previous master bath, and he's got a top-notch finish carpenter who will become our new best friend.

    Demolition starts in 2 weeks (a third party green demolition team), the house will be tented for termites, and then Contractor 5 will start the week after that.

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