Bid Low On Current Project What To Do ?

boston 08

Newbie here,

I recently started a remodeling company at the age of 25. I have over 8 years of experience and thought that I would give it a shot and venture out on my own. I have lots to learn still such as, Bidding, overhead costs,advertising etc.
I have been working on minor remodeling and painting projects. In Jan I bid on a decently big remodeling job and landed it. As ecstatic as I was for landing such a big job I had not run the figures as I should have and I am now suffering from underbidding on this job. It is a complete residential remodeling project,
scope of project:
started as 2 level home down to studs

Inside work:
1) Install insulation & Sheetrock entire home tape+mud & sand
(walls+ceiling)
2) install new hardwood floors throughout approx. 1300sqf
3) install kitchen cabinets
4) new threads and risers on two sets of stairs approx. 26 steps
5) install baseboard and trims throughout
6) replace 2 windows
7) 1 coat of primer on newly installed Sheetrock
Exterior work:
1) tyvek and insulate entire home
2) install vinyl siding
3) remove old roof shingles and replace with 3 tab shingles
4) remove entry concrete stairs, replace with brick sides, brick risers &
slate steps + slate landing (4 steps total + 4 by 3 landing)
5) build small porch on back side of home ( wide as a French door ) 6 steps

all plumbing and electrical work are being done by friends of customer not subbed by me. I know I under bid this project by "allot", not too sure by how much. I was told this by the plumber working on the site ,If anyone could run some figures please do let me know, will be MUCH appreciated.

I estimated it all for 19,900.00 labor only no materials. Contracts were signed. I am now running out of money and no means to pay my employees. The customer is refusing to give more money until the job is complete. I have had allot of problems with this client. I never had any plans to work off and never knew when materials would be placed or arriving on the job site. I have been on him since the get go and never got a straight answer. I started this project in Feb and its now Jun, The reason for it taking soooo long is due to client not knowing what he wants and not ordering any materials . In which case I had to start taking on side jobs to pay the bills. Also I have done extra work that adds an additional 4500 to the total. I calculated all of the payments payed to date and came up with 15,800.

So after all this my question is:

knowing I underbid one this project and have signed a contract with the home owner on the price and payment terms, could I Legally re-write the estimate in which case I would charge him more for the project at hand?

The Thought of walking off on this job has run through my mind ALLOT, but would rather not. It has been such a pain working for this client that I don't know what to do.

Can anyone please help me out in terms of what you think I should do. ?

Thanks for any future reply s ....

Patrick

wow speechless

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Originally Posted by Celtic
Like I said...I'm sure you are very good at what you do ~ whatever that is and where ever it happens.

healthyhomes

oh man................

I think you need to sit down with the HO and explain things honestly. You have REALLY shot yourself in the foot here. Maybe HO will understand.

You cant walk away though

genecarp

wow, have a conversation with the client, be honest, hope for mercy, you dont have many options, good luck G

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Bone Saw

another strike for CONTRACTORS the world over
thanx man

NICKPAUS

Dont walk away yet. Have a meeting with homeowner explaining how this has dragged out longer than expected since you had to wait for his decisions. Dont let him think you under bid it. If everything was there you could of worked more efficiently saving on paying employees. Log all work and create a list with the extra charges and why-time. You will learn from your mistakes. Bidding will make or break you and if you dont know your overhead and what it will take stick to T@M bids,

rbsremodeling

That much work with out plans. Did you need to have plans to legally do the work? That might be you ticket out hint hint

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AtlanticWBConst

You need to have a serious talk with the home owner.

First off, you are going to have to eat some humble pie, and tell him: tho you are good at the work, you are new at bidding and doing your own jobs, and apologize. That doesn't mean that everything will be hunky-dory.

You need, to beg for Mercy. Hopefully you at least performed $19,900.00 of work on the property. That way he got his money's worth.

Aside from that, I hope you learned a lesson. It looks to me, like you pulled a random number out of your "hat". That is no way to bid a job. Every nail, every screw, every minute, every possible overhead charge, every gram of gas, every possible delay, etc.....must be accounted for, before you bid a price.

Just looking at what you listed for work, I could see that you are way, way "the heck" off on your pricing (not even in the ball park for the work).

Good Luck, you're gonna need it.

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- Build Well -

DavidC

I completely agree that you should talk to the HO, and soon.

But my first visit would be to my attorney with the contract. It's a long shot, but he's the guy to look for it. At any rate a good strategy is to have all the facts yourself before talking to an adversary.

Who wrote your contract? Any provisions for timely decisions? Delays caused by the owner?

If you can walk it would also be best to do so with your attorneys guidance, IMHO anyway.

The good news is you paid for a real education so don't waste it.

Good Luck
Dave

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www.CookContractingLLC.com

AtlanticWBConst

Chances are the PO, as a newbi, doesn't have alot of protection in his contract, most newbis don't when they are starting out. Even I didn't....

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- Build Well -

Jason Whipple

Bad situation for sure. Can you pull it off if the H/O makes all the decisions on finishes? If so, pull off until they are made. Explain the extra cost to you for the indecisions and that you didn't predict any slow downs on the job in your prices.

Sounds like the job should have been t&m. We've all been through it though. Get the job organized. The H/O can't run the schedule on the fly when you give a solid bid.

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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DavidC

It is a long shot for sure. I've learned the rough way to get legal advice early. You can bet the HO will lawyer up if it gets dicey. He may already have.

I don't know the facts in this case at all, except as presented in the OP. But I do beleive that there are some folks that lay traps for certain contractors.

My own contract has been paid for by much more than the attorney fees.

Good Luck
Dave

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www.CookContractingLLC.com

AbeBarker

Why isn't the HO trying to work with you allready? The whole story please.

Plumber_Pete

Sounds like you screwed yourself but I have been there. Talk to him honestly and hope for the best, but be prepared to eat it. Walking away would be the worst thing you could do especially since you are new and need the word of mouth.

ProWallGuy

I can't really add much more than what has been already said. But I have to comment that your honesty is refreshing. Most come on here and try to blame someone/something else other than their own stupidity. Good luck on this one, and don't forget the lesson learned.

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Wallpaper Hanger St. Louis
Digital Murals Installation

VitoFromNJ

'And no means to pay your employees'

Seek employees who want the boss to win

I hope you bounce back

rubber duck

As much as walking will feel like the easiest way out i would stay and finish. Then learn how to bid and hope that this is the only time you learn this much

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Guns kill people like spoons made Rosie O'Donnel fat

OCRS

I know this must be hard for you. That sick feeling in your stomach. Do like the guys have said and talk with the HO. It'll be hard to be grovelling especially when you were so confident at the beginning and with the HO giving you a hard time but just keep telling yourself, it's just business. Take your time with estimates. Droping $100.00 to make it look less high doesn't work. Base you quote on your #'s not the look of the #. Hope it works out for you.

wyoming 1

I'm in the same boat with everyone else we have all paid for an education one way or another. My question is how much work is left? If its not much fiqure out a way to suck it up and finish be it work some weekends and late nights and chalk it up to education. If you are less than half way refigure whats left and present it to the ho and see if he will step up if not then maybe try how about splitting it with me. Good luck I have been there too

Bob Kovacs

And what does that mean? Are you saying that his employees should work for free to finish the job, and hope there's some money left at the end to pay them with??? Sounds a bit hokey to me.