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baffling price difference between contractors
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Posted by ericf (My Page) on Sun, Oct 4, 09 at 14:38
| Been planning a large remodeling project for almost a year and contractor bids are now in.
There is a sizeable gap between the two contractors I would consider using. One is a guy -- we'll call him "A" -- I have used before and who is reliable and does good work. The other -- "B" -- has an equally good reputation and has worked with my architect on several previous projects: they recommended him as being in the same class with regard to quality.
A's bid is 15% (a 5 figure #) higher than B's. Can anyone offer insights that would help me understand this gap? I expected them to be a lot closer than they are. |
Follow-Up Postings:
RE: baffling price difference between contractors
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| It could be the size of the construction company, a GC OH&P markup difference, a larger contingency for undesigned or allowance or design-build elements, or one GC needs the work more than the other, or all of the above. |
RE: baffling price difference between contractors
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| I'm surprised that they are so close. I've had remodeling bids that were twice as much from one company as another. If you like the "A guy," tell him you like his work, but have a lower bid, and see if he has any room to revise. I did this once with a trusted contractor I had used before, and it turned out that he just did a quick and dirty bid. After we talked and he knew I wanted to use him, he got much more precise and his bid came way down, so I went with him again. |
RE: baffling price difference between contractors
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did you check the specifics of the bid--
are they actually bidding on the same fixtures/installations/appliances or are is one just offering "allowance" does one have larger crew and hopefully would finish quicker
does one have to sub-contract out part of the job-- |
RE: baffling price difference between contractors
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| My suggestions are this: 1. Make sure that you have an Allowance schedule and the same set of specs that both are bidding. I know that I have bid projects submitted by an architect with drawings, but not many specs. I generated a long list of clarifications and specs for the job, along with my bid.
2. Meet with both of them. Tell them of your concerns--see what they say and how they handle it. Develop a list of questions: who will supervise this, what is your markup on change orders, will you reduce your markup on high ticket items (like cabinets). Trust your instincts during the meeting.
3. Hire the contractor that you feel like you can best work with. Look, it will cost what it costs. If a contractor is not making money on a job, they will either give you poor service or find a way to change order you to get to where he makes money. ESPECIALLY easy to do with a remodel. You want to hire the person who will treat you most fairly.
4. Do not rely on the architect's opinion of the contractor. Go talk with the previous clients. Several of them. Do your homework on the contractors!! Really...really...important. Ask those prior clients if they would use them again? How were they treated on change orders? Level of quality? |
RE: baffling price difference between contractors
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| Do you have details? I had a similar situation with a big difference in prices - one GC could get way cheaper labor than the other. Another reason was smaller differences which I found out later - for example, in custom kitchen drawers, one GC planned to do solid with dovetail while the other veneer on plywood with biscuit joints. I found out these types of details only after I got another bid where this was laid out. While biscuit joints work fine in my case, solid wood with dovetails for drawers is much more expensive and labor-intensive. All of these make a difference in pricing, but are not easy to discern by just looking at the bid. Its best to be as specific as you can at the initial phase to get an accurate pricing. |
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