The bids are only as understandable and comparable as your original bid specs. You have to nail down all of your choices in the beginning in order to be able to compare "apples to apples". It's a bit late for that now, and you're left with trying to interpret essentially different bids that may not actually be for the exact work you want to see done.

So, Rule #1 is to toss out the low bidder and anyone else in the pack who isn't licensed and insured. They aren't including items that the others are, and they'll end up being the high bidders in the end, especially if you end up paying for an on the job accident for one of the workers. Rule #2 is to examine the high bid for items that maybe the medium priced bidders forgot. If they are including permits and tiem spent getting permits, or higher end fixtures for instance, you want to account for that in the price difference. Rule #3 is to look in person at the guys in the middle's previous work, and ask questions from the homeowners who have used them. Rule #4 is to not nickel and dime the contractors to death to get them to get their bids down. You'll end up paying the difference in the end with corner's cut or bad attitude. If you like a guy, go with him. A bid is the best price he'll give you. Rule #5 is to set aside at least 20% over the intial budget for cost over runs, because you'll need it if surprises behind the walls crop up, or you just have to have the diamond encrusted light up shower head. ;) Most people go into construction projects under funded and under prepared for all of the many decisions that are required. Don't make both mistakes.

Did you have them bid against very detailed plans and specifications? If not, live wire's right, and it'll be tougher to compare.

I'd set up a spreadsheet. Find the most detailed quote and list all the subcategories they included down the first column. Then put all the GCs across the top, and fill in the blanks, either with a $$ amount or "included" if they didn't break it out but they did include it in the package.

If they bid using different materials, then one of the categories in the first column should represent that, with the details filled in across for each one.

Here's how I'd picture it (excuse the dots; it's the only way I could make it have spacing):

............GC-A..........GC-B..........GC-C .....
Permits.....$500..........included......by owner
Demo........$5000.........included......$6000
Framing.....$3450.........included......$3000
Toilets.....Kohler.........Kohler.......Toto
Floor.......pre-fin oak...pre-fin oak...site-fin oak
Floor labor..$11,000.......$12,000......$15,000
Floor mater..$10,000.......$9,000.......$5,000
....

If their bids are so vague that you're not sure they've included all your specified materials or phases, then call them and ask for clarification. If they've bid off of detailed plans, though, as long as their bid references those plans, you're ok with just having a bottom-line dollar figure.

I wouldn't automatically toss the low bidder. But I'd look carefully at any bid that was unexplainably lower than the rest, if they tended to cluster around a higher amount. They may be leaving something out, hoping for change orders down the road to make up their cash.

If large crews of subcontractors are lined up back to back on a job, they certainly could finish faster than two guys working full time over the same period. After all, a crew of 20 can frame a house in a day, while a crew of 2 would take a couple weeks. But it's likely that they two guys would work exclusively on your house for the duration while the others would employ the subs, but with a few days in between them here and there (kind of tortoise and hare). Talk to some of the references of the small guy and ask about your timeliness question.

Good luck!

Thanks, you guys, for the extensive responses. I'm already working on the spreadsheet, as you suggested. That should really help.

We did offer the plans to each gc, of course, but did not have a detailed spec list. In hindsight (and for all of you who are following in my footsteps) that would have been highly beneficial. Some things, I was able to be very specific on because I have already made those choices. Other things, well, I haven't gotten to deciding on them yet.

We started the planning process in May (interviewing architects), signed the design contract early June and got our plans completed in mid-Sept. By the time the GC's came through and worked up their bids, we are pushing Thanksgiving! And to think that I naively thought that we might be done with phase 1 by Christmas (that was back in May).

Live and learn and move forward! : )

Sandy

You've had lots of good advice above. A few random ideas, then...

Since you mentioned that you don't have completely detailed specs, I'd be a little worried about the quote that came in 3 pages, doublespaced. If you like them enough to go to a second round, have your architect put together the details and let them bid again. That way, you've got a paper trail to refer to if there's any dispute. (mightyanvil might want to weigh in here about what an architect can provide...)

re: lowest bidder. Personally, I'd toss the low bid because I don't want the risk of having to scrutinize that quote to see what they've skimped on (materials? allowances? ambiguous markings on the plan that they've interpreted cheaply?) I worked briefly for a bunch of vermin that would *very* deliberately leave out big-ticket items (ie, new furnace for a house more than doubled in size) so they'd get the low price that would get them the deal.

Don't underestimate the importance of personality. Remodeling causes stress, and working with someone that you relate to well is important. Admittedly, contractors (just as customers) might be extra nice at the outset, but you'll question the references about how things went when the chips were down, right?

If the 2 guy team is not bringing in subs for certain tasks, then they will probably take longer. However, the end-to-end consistency of two guys will also probably lead to better quality. Note my generous use of the word probably... every situation has variables.

I'd ask about the subs they use... have they been working with them for long? (Longer is usually better.) The reference clients will be able to say whether the subs were awful or respectful of their surroundings. (Ideally, you want everybody to treat the jobsite like it's also someone's home.)

Lastly, schedules are good things to have, but don't be surprised when things go a little awry. It only takes one bit of the process to be off to blow your schedule.

this is the perfect example of why the bidding process does not work. Throwing out any bid based on price is wrong and you should question your architect as to why there were so many bids. Did you interveiw each contractor before inviting them to bid? Most plans are not detailed enough to get an accurate idea of what it should cost so one company estimates based on high end construction processes and another development level. Choose a contractor that you trust and move forward. Throw the bids out, get a realistic price from an honest GC and hire him. Will things come up during the project? Of course, and you need to be ready for that. I have copied your post to use as an example in my classes, it is perfect!

In this case, I have decided to eliminate the lowest bidder. Not based upon the fact that he is the lowest, but because he is unwilling to share the contact information of references until we commit to using him (says he doesn't want to unneccesarilly take up his former clients time).

That and the fact that his bid was the one that offered no details as to the work to be performed. And his allowances for 'finish' items was extremely low (for example he allowed $900 in his bid for cabinetry, countertops and hardware for 2 vanity areas and an 11 x 9 laundry room)

We began with the intention of getting 3 bids. Then our friends brother was recommended, so we interviewed him and invited him to bid. The last guy (who happens to be the low bidder), called ME after I had visited his website while researching local custom home builders/remodelers.

Bellamy, your advise regarding getting "a realistic price from an honest GC and hire him" makes it sound so easy! : ) My question in response would be: how do I determine what is a realistic price without the bidding process?

I really appreciate the advice and insight that I have gotten so far! And I hope that your students can learn something from my posts, other than there are a lot of confused and unprepared homeowners out there! : )

Sandy

Make sure that the contractors have experience with additions as opposed to new construction.

Here are my 2 cents..lots of good comments so far

I also agree..dont throw out the low bid just because it is low
-payment terms..i am not in favor of paying deposits and i think paying multiple payments as work progresses is the way to go. and the final 5% a day or 2 after everything is done. THe contractor who suggests something like this would get on my short list
-not having all the material detailed out in a request for quote would make me really nervous..i like to have each and every part called out..faucet my moen, cabinet by XXX, model numbers everything. You have to decide on a lot of this anyway..and it is fun to shop. If you dont have the details things can easily go wrong and also quotes can vary a lot..especially for bathrooms and kitchens
-if you are good judge of character i would let that be your final judge if all the bidders are equally responsive, have licenses, insurance and good references..who do you want to talk to every day for 6 months and who do you think has the right work ethic
-regarding small and large contractors..i have found that size is not a indicator of quality or performance in the long run

I lot of this information i go from a small handy book called the Contractor Selection Workbook

Good luck

Check to make sure all are licensed and bonded (just b/c they say they are does not mean that they are).

Also check to see if the contractors have been sued either personally or as their business. This is very important and will give you a sense of how they run their business. You will also be able to find out if they have any DWI, outstanding warrants, behind in their child support, etc. All of this can impact how they run their business and their cash flow.

I would also make sure that they do background checks on all their employees (ask for proof). I have small children and am very careful about who is in my house. If their answer is that they have insurance, be wary. Of course they should have insurance, but that's not going to do anyone any good if something happens - money can't fix everything.

And if they have worked with someone for a long time - great, but I would still like to know if they were checked out.

I knew someone who vouched up and down for his neighbor. When his neighbor was accused of being a sex offender (his relatives came door-to-door warning the neighbors), I was told that no, that's not why he was in prison, it had to do with him not paying child support (like that would be acceptable, but don't get me started). Even after I told him that I located the man's court records online and his listing on the sex offender registry, he still didn't believe me. It just goes to show you that people sometimes choose to be blind to the facts. And depending on the facts, this could lead to trouble.

As with everything, let the buyer beware!

Such good advice here...I appreciate every tidbit from those that have gone before me!

I have narrowed my selection down to 2 and made the phone calls to the 3 that weren't selected last night. Their reactions varied greatly: from 'you will have a beautiful home' and 'I would love to see it when it's finished' to 'I just hope you know what you might be in for since you didn't chose us' basically. Interesting.

The final two have answered all of my questions and I know which way I want to go. When my DH returns from his hunting trip on Sunday, I hope to lay it all out for him and have him give me the 'go' to place my final 2 phone calls on Monday.

In the end, it looks like I will be choosing the GC that is in the middle of the pack, price-wise, but who I feel will be the easiest for me to personally work with. He is creative, hasn't reacted to some of my off-the-wall ideas, and his subs seemed very insightful and experienced. Also, his references offered absolutely consistant remarks regarding his quality of work and ability to deal with issues that arose.

So, the end of this part of our project is near for me and I am mighty grateful for that!!

Sandy

When a project has been well documented and the allowances clearly identified with no labor included (if the amount has not already been set by the Owner) and the request for bids contains a written Bid Form, then the bids should be easy to understand (and usually don't need to be broken down) but that is rarely the case since Owners so often rely on Builders to provide some amount of design and material selection assistance during the construction phase. And there in lies the problem.

If every Builder is free to break down the price in their own way and describe their design/selection services differently or even make alternate proposals in their Bid Proposal, then there is no way to accurately compare them no matter how carefully you put them into a spreadsheet. In the end, the spreadsheet breakdown is unlikely to be a part of the contract so be careful; it can be the basis of serious misunderstandings later.

On commercial and some residential projects bidders must fill out a Bid Form where allowances and/or alternate proposals are not permitted unless they are described in the Alternate or Allowance sections of the Bid Form.

The problem with most home builder contract proposals is that they are a mixture of Fixed Price, Cost of the Work, and Design-Build contracts and the Owner is left to figure out who is using what approach for what aspect of the Work.

It can't be done well and Builders rely on this fact to boost their income; whether it is intentional or deserved, I can't say; I just know it is usually sloppy and therefore risky if you are on a tight budget.

Lots of good suggestions here. I'd like to add one more for consideration: Be responsible for choosing/purchasing your own plumbing fixtures (kitchen/bath/laundry sinks and faucets, toilets, etc) and lighting fixtures (anything hanging from a rough-in box). That way he basically needs to be responsible for having pipes come out of the wall at the right spots and electrical boxes in their place. He also installed them once they were purchased. The quality/price of what gets installed is up to you.

Our GC let us use his contractor discount at various local suppliers if we wanted. And had no problem if we wanted to buy over the 'net, on ebay, craigslist, or whatever. (Just make sure he had them on schedule. :)

The good thing about this is that it takes a variable out of his bid. The bad thing is that you have to take the time for some comparison shopping. But put the charges on your credit card, get some free plane tickets, and have some fun out of the deal.

I would leave much more than 5% due at completion. Builders like to *BUILD* a lot more than they like to do the finish work. They'll promise and then often walk, leaving that teeny bit on the table.

Many subs will not guarantee anything *THEY* do not supply. If the tub faucet you bought on ebay leaks and water cascades down your stairs...it's on you. When subs figure a price, they may be discounting labor while they plan to profit on the mark-up at the supply end. The manufacturer (Kohler, Moen, whatever) won't warranty second-market stuff either, far as I know.

Smart to choose someone you can talk to, work with. Someone known to your municipality's building department (In a positive way!) is a bonus.

Good point, chisue, about the subs not guaranteeing work on fixtures they did not supply. I'll have to ask about that.

We still haven't signed a contract. There are a couple of details that my dh wants clarified and, between his schedule and the holidays, we are just moving slow.

Great discussion here. One thing to add is to make sure you have a requirement for lien waivers for everyone who steps foot on your property and for all suppliers. A good GC will have a simple process for this -- a bad one will tell you all the reasons why you don't need it. You do, as we were burned by that once and spent hours sorting it out.

Chisue makes some good points. There was some responsibility, of course, to provide them with new (or highly reusable) items. If something was obviously not serviceable, we would (and in a couple of cases, did) hear about it. For example, we reused most of our kitchen appliances. The only new appliances I had to buy were the wall oven and built-in microwave oven. We ended up tossing some Grohe fixtures that did not make sense to reuse. We also tossed (actually freecycled) an almost new ISE disposer for similar reasons. For the $200 it cost for a new one, it was worth the peace of mind. I can stop by Home Depot and pick one up just as easily as the contractor can.

Warranties can be useful but they often get more respect than they deserve.

Product warranties are provided by manufacturers (that stuff you usually throw away with the box) to the purchaser which can be the contractor or the owner regardless of what dealer sold it but you may have to produce a receipt to establish the date of purchase.

So, there is no loss in protection when an owner buys an electrical or plumbing fixture and supplies it to the contractor except that it puts the responsibility for analysis of a future problem, removal of the item, and re-installation on you for a limited period of time.

The general contractor usually only gives you a one year warranty on everything. When you buy your own materials you are also risking the possibility that it fails in the first year and the contractor claims (wrongly), that it was due to your fixture rather than the installation and you can't prove otherwise.

My experience is that good materials rarely fail in the first year but the stuff you might buy at Home Depot often fails within months. So buy the good stuff if you're going to bother to supply it yourself.

Water cascading down your stairs should be covered by your homeowner's insurance although a defective faucet is more likely to only drip into the fixture. A breach of the piping is clearly the fault of the contractor although after a year it is your problem.

IMHO the biggest risk in providing your own high quality materials is that the contractor might see it as unfairly reducing his income and rush through the job. This is his business, not his hobby.

In the end this issue requires a simple negotiation between the Owner and the Contractor where hopefully each party is attentive to the needs of the other and no one muddies the water with specious issues like warranties. The biggest concern of the contractor should be that the owner maintains a reasonable level of material quality and fairly compensates him for his work.