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  1. #1
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    Default Project Quote Question

    If the customer has already priced or purchased their selections, is there any purpose for a general contractor to include material selection allowances in the bid? Is there such a thing as a labor only quote when it comes to a major remodeling job like a kitchen or bathroom?

  2. #2
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    Default Re: Project Quote Question

    Labor only quotes can work. But make it be understood that any holdups due to the material not being on the job site when need will result in additional charges.
    John

  3. #3
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    Default Re: Project Quote Question

    probably about 75% of my quotes do not include items that a customer has to pick out such as kitchen cabinets, bathroom vanity, tile, faucets, etc. it's something i discuss when meeting with a customer for the first time. i explain the whole process of the job to be done, what's going to be done and when it's going to be done. i ask them what they have purchased, or what they are thinking about picking out. very rarely, on a first appointment, has a customer known what cabinets or other items they are going to install. then comes the question "so how much do you think this is going to cost me?".....to which my reply is usually "anywhere from $20,000 - $50,000".

    how i handle this situation is to ask "generally" what they want to do to their kitchen. they'll explain it to me, we'll go over options and other ideas and i'll offer to make them an estimate based on labor and building materials which will later be "tweaked" based on the items they pick out.

    my estimates will include everything we will do including the cost of building materials and at the end i have a section that states what is not included in the estimate such as cabinets, countertops, sink, faucet, appliances, etc, yet the installation of all these items are included.

    occasionally, but rarely, i will make an estimate with an allowance for certain things. most often happens when a customer has a very strict budget but it can limit how much they have to spend on other items.

  4. #4
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    Default Re: Project Quote Question

    figured i would add this to my previous post. this is an estimate i did last night for a bathroom remodel which should answer your question and it's how almost all of my bathroom estimates look.

    Scope of work:

    1. Gut bathroom to studs including ceiling and floor
    2. Replace sub floor under tub and reinforce joists
    3. Remove arch opening over tub
    4. Electrical
    a. Install recessed light over tub
    b. Install ceiling fan vented to exterior
    c. Install light over med cabinet
    d. Install outlet next to vanity
    5. Plumbing
    a. Install new Americast tub (white)
    b. Install new shower valve, tub spout and showerhead
    c. Reinstall existing pedestal sink
    d. Reinstall existing toilet
    6. Insulate exterior wall
    7. Install blueboard and plaster on walls and ceiling
    8. Install hardibacker on tub surround and bathroom floor
    9. Tile tub surround to ceiling
    10. Tile floor, wall to wall
    11. Install finish trim
    12. Paint bathroom ceiling, walls and trim
    13. Waste removal
    14. Daily clean-up and project completion clean-up included.


    Bid Clarification:

    1. All MLB Construction employees are working under workers comp insurance and general liability insurance of MLB Construction.
    2. Unforeseen site conditions, subsurface deficiencies that need corrective work in order to complete work under this contract will be billed at an hourly rate of $55.00 per hour plus material costs.
    3. All additional work outside this contract will be billed at an hourly rate of $55.00
    4. All materials/invoices purchased under Bid Clarification No.02 or outside this contract will be subject to a 15% overhead and profit charge.
    5. Additional work provided by subcontractors to be billed at cost plus 15% for job supervision.
    6. Any additional unforeseen work required by the building/plumbing/electrical inspector will be billed separately.
    7. Ikea cabinets will have an additional charge of $40/hr for assembly
    8. Any tiling work is based on installation on the square. Installation on the diagonal or mosaic inlays will be additional, glass tile installation will be extra..
    9. Payment of any additional work is due upon completion of additional work.
    10. All jobs done on a permit are not subject to the estimated completion date.


    Notes:
    1. Not included in this estimate are the cost of the following items
    a. Tile, grout, shower valve, toilet, vanity, sink, faucet, light fixture over vanity, mirror/med cabinet, finish wall paint color
    2. Included in this estimate is the cost of the following items
    a. Tub, recessed light over tub, primer, ceiling paint, trim paint, building materials as stated above


    copying and pasting doesn't make it look as professional as it normally does but i hope you get the idea and i hope this helps.
    Last edited by MLB Construction; 11-12-2013 at 08:53 PM.

  5. #5
    Join Date
    Dec 2010
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    Houston Texas
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    Default Re: Project Quote Question

    My bids are pretty similar to MBL's with the exception that mine are done on an Excel spreadsheet which does the math so when a customer plugs in a new number for a faucet or tile the overall cost of the job automatically changes. They can then see the impact of the choices they make and just how many items go into a project.

  6. #6
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    Aug 2007
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    Default Re: Project Quote Question

    Quote Originally Posted by johnjh2o View Post
    Labor only quotes can work. But make it be understood that any holdups due to the material not being on the job site when need will result in additional charges.
    Also, buying a sink and faucet is not all that is entailed with installing a sink, you've got strainer baskets, garbage disposals, dishwasher hook-up, trap and drain connections to the wall, etc. While the sink and faucet are the biggest part of the parts bill, the incidentals add up quite quickly as well.

    Lastly, this example is for a sink, but is appropriate to quite a few different parts of a remodel, as MLB and Houston have pointed out.

    So, to answer your question, yes, you can get a "labor only" price to install something you purchase, but that item may need incidentals that will be added to the "materials" side of the bid as well.
    I suffer from CDO ... Its like OCD, but in alphabetical order, LIKE IT SHOULD BE!!!

  7. #7
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    Houston Texas
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    Default Re: Project Quote Question

    Also, buying a sink and faucet is not all that is entailed with installing a sink, you've got strainer baskets, garbage disposals, dishwasher hook-up, trap and drain connections to the wall, etc. While the sink and faucet are the biggest part of the parts bill, the incidentals add up quite quickly as well.
    So when I line item each and every part, screw, nut, gasket, and such, the homeowner realizes how well we think things through and how many parts there are in what goes into a simple sink installation.

  8. #8
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    Default Re: Project Quote Question

    Quote Originally Posted by HoustonRemodeler View Post
    So when I line item each and every part, screw, nut, gasket, and such, the homeowner realizes how well we think things through and how many parts there are in what goes into a simple sink installation.
    I don't think I'd go as far as line iteming all the extra parts, but yes, we do think things through pretty thoroughly due to our knowledge of the process that most others don't have.
    I suffer from CDO ... Its like OCD, but in alphabetical order, LIKE IT SHOULD BE!!!

  9. #9
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    Jun 2010
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    41

    Default Re: Project Quote Question

    Glad to hear this is an option. I got push-back from one contractor who said it made no sense to do a labor only quote. I told him that I generally found quotes with included material allowances to be essentially worthless as the allowances were almost always unrealistically low and misleading. I said I'd prefer to keep the bid "clean" and leave the material selections to be determined by me and my budget. I *think* that contractor may not have wanted to go that route because he was expecting to increase his margin by keeping part or all of the supplier's courtesy discounts when I made selections. But, unless he was putting in the time to help me research and shop, I wouldn't feel very good about that. Any cost to him to handle the logistical arrangements could just be build into his labor-only quote (in my opinion).

  10. #10
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    Default Re: Project Quote Question

    Quote Originally Posted by handsindirt View Post
    I *think* that contractor may not have wanted to go that route because he was expecting to increase his margin by keeping part or all of the supplier's courtesy discounts when I made selections. But, unless he was putting in the time to help me research and shop, I wouldn't feel very good about that. Any cost to him to handle the logistical arrangements could just be build into his labor-only quote (in my opinion).
    This is an extremely touchy subject for most contractors, yes, we do get discounts from most of our suppliers, but overall it is a pittance to the big picture, which, IMHO, is a happy client who gets as much as they can afford as possible.

    Also, as I previously mentioned, there is more to most things than just purchasing the big ticket item, there are usually quite a few incidental parts and pieces needed for the installation as well, these parts and pieces are not free, nor is the time to source them. So you picked out the perfect tile, did you buy the grout, thinset, backer board, or the other stuff that will be needed for the install? You just bought the most beautiful hardwood, what about the baseboard, specialty trim pieces, glue, nails, etc? What about delivery of your chosen items to the job site? As was mentioned earlier too, if you don't buy the right stuff, then that holds up the job while one of us rectifies the problem.

    My work around for this sort of thing is to send you shopping for whatever you want, I won't include the big ticket item in the bid, but I will have all the incidentals figured into it. If I have to pick up your items, then I'm on the clock for that, including fuel/vehicle expenses. You'd have to pay most stores to deliver your items, why would you think that the contractor would do it for free? I'm not saying that you, handsindirt, feels this way, but from the general client perspective, this is more common than not.

    To be completely honest, I don't think I've ever broken down a bid into time and materials, for a variety of reasons, mostly because it hasn't been necessary. When I said I want a happy client who gets as much as they can afford, I mean exactly that. I have spent my career educating people on what true value and true cost actually are. True value is doing things right the first time, with quality materials, to produce a high quality end product that will last for years to come. Yes, you will spend a little more to do it right the first time, but then this is where true cost kicks in. True cost is basically the opposite, it is doing things cheaply and/or sloppily, producing an end product that won't last or that will prematurely fail, requiring even more expense to replace it.

    There is also a third component to my educational process, and that is the difference between what people "think" they can afford and what they can actually afford. The difference here is an easy explanation, and it's exactly why I write bids the way I do. What you "think" you can afford is being unaware of what your money will buy you. What you can actually afford is knowing your ultimate desires, and getting bids with options for upgrades.

    My first question to any new client is not how much they have to spend, but what EXACTLY they want if money were no option. This allows them to really express their desires and not think about money for the time being. Once I'm certain that I've got a good handle on their vision, I can work out a baseline bid that does not skimp on quality, but does not give you any frills, the options allow your desires to come forth by way of choosing what upgrades fit your budget, and ultimately get you more of what you want for what you have to spend. Think of it kind of like buying a new car, a base model gets you an adequate vehicle, the options allow you to get a better engine, better seats, better stereo, etc., remodeling is very similar.

    To clarify, the baseline bid is a price for the total scope of work, the options are line item priced which are then added to the baseline for a project total. This is how I've handled every single client in the past 25 years, and every one of them has marveled that they got so much more than expected out of their budget. This way of thinking has not only given me a list of life long clients, I have gotten invaluable word of mouth advertising from them as they recommend me to their family and friends. Education is key, and any contractor that doesn't approach their clients with this in mind is not doing the client or themselves any favors.
    I suffer from CDO ... Its like OCD, but in alphabetical order, LIKE IT SHOULD BE!!!

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