What’s in a Contractor’s Price?

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Do we actually understand the home improvement bidding process and what goes into a contractor’s final price whether it is a home or commercial construction project?  Not many people understand, nor care about what goes into a contractor’s bid.  Just that it must be the best price and what you want.  However, understanding how contractors bid on projects can save you money in the long run and minimize delays.  It is no different than having a lawn mowed, trees trimmed, driveway paved, office painted, and so on.  All estimators factor in common costs/routes and then the exceptions (additional work time).  Contractors take all kinds of factors into play when they are estimating.  Some use a general estimating principle and some are more detail-oriented. Contact us for more helpful tips before you take on your next home or commercial construction improvement project

Contractor pricing Explained

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All contractors are typically figuring the most economical bid, regardless if they are low or not.

There are three key things to know how to help contractors give the most competitive bid:

  1. Details-permit approved drawings and detailed material/product specifications.
  2. Expectations-quality expected warranty, timeframe, and restrictions.
  3. Clean Site-not a lot of obstacles to work around, move if needed, or remove/reinstall to complete the project.

Following our D.E.C. specs can save you time and money in getting contractors’ bids.  Those rules of thumb will help streamline more competitive bids.  For example, when a potential client asks contractors to bid off of unapproved plans/specs.  They tend to get contractors that hedge on what-ifs and unknowns, which in turn, can give them a less than competitive bid.  Not only is it not as competitive, but the potential for problems with the low contractor’s bid.

Home Improvement Tips

One current ‘issue’ clients are facing with contractors are low bids that have long timeframes. Some contractors have caught onto a newer trend building off of volume. Which has been a disaster for clients and their expected reasonable timeframes. Unfortunately, the ‘smaller project’ clients tend to be the cushion, the ‘volume contractors’ exploit if their contracts do not have a reasonable time constraint. An example is a client may get a 10%-15% lower bid from a contractor, but they have a timeframe that is double the other contractors. Which brings into question, why, and how much extra will this cost the project. That can be a huge problem on a budget/loan. Regardless, time is usually money, and the longer the contractor extends the deadline, the more interest and rent it can cost the client. So always evaluate the contractor’s bids, references, and inclusions/exclusions to a bid.

Just like anything, simplifying a project will result in a more efficient bid. However, there are always projects that are more complex, and simplifying is not always an option. Unfortunately, in those circumstances, you will have to use your best judgment on deciding on a contractor. One that is a reputable company is always a must, with good references and preferably not just someone’s cousin or relative. Contractors that are members of reputable construction organizations like the Builders Association, the American General Contractors Association, the Springfield Contractors Association, or the Home Builders Association of Springfield are very much recommended. Those contractors are not your “fly-by-night” contractors and rely more on reputation than making a quick buck during a disaster. So in a short summary, simplify your projects as much as possible and follow our D.E.C. guidelines for the most competitive bid for your project. Not only will it typically save you money, but it is very much appreciated among contractors. Most contractors do not like to assume or guesstimate items forbids, because they do not want a mad client on a misunderstanding in the bid. It’s a win-win for everyone involved.

Contractor Pricing Tips

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