contracting subs - Contractor Talk - Professional Construction and Remodeling Forum

A.W.Davis · 12-12-2006, 09:32 PM

I am sure this topic has been discussed here before, unfortunately my search prevailed nothing.

All my jobs have been small kitchen remodels and usually the only subcontractor I need are my sheetrock subs. Typically he (my sheetrocker) will look at the job and give me a price on what he thinks the job will cost, I then add 20% to the contract for the sheetrock work. Its a simple system and works well for me and my subs.

Now to my question at hand....what do you GC's do when subcontracting out tile and plumbing, maybe I am answering my own question but I would still love to hear what you guys do, I would assume for my plumber I would fax him everything I need him to do with specs on all fixtures installed and the homeowners address so he can inspect what I need done on my list and have him fax or e-mail me an estimate.

What about tile, do you guys submit a drawing of what the job will look like so the Tile contractor has a good idea on what he is estimating, I would hate to spend hours drawing a tile layout for a job where the homeowner is a tire kicker and I have spent hours of wasted time. Hiring subs is new to me and I want to take tha appropriate measure that all of my subs are paid for their work and I make profit!

Lastly how did you find your subs....did you just flip through the phonebook, did somebody refer them to you, or did you see their service truck rollin down the freeway and decided to give them a ring??

I am gearing up to be self employed in the next few months and just trying to get helpfull insights!

Mike Finley · 12-12-2006, 10:04 PM

The key for me is knowing how my subs come up with thier pricing. Since we are doing the same things over and over again it's pretty easy.

I use my retail numbers to figure the job and only when the job is a job do I then send a detailed scope of work to the sub, along with a drawing.

house bldr · 12-12-2006, 10:24 PM

I know most GC's add to their subs bids,but when we build a house we get a firm bid [not an estimate!] in writing from all subs and pass on exactly that price to the customer no mark up.We don't make any money off subs but also don't loose any!There are times we have to play middle man between the sub and customer but kind of figure that into our part of the bid.I live in a rural community with pretty competative bidding and adding to all subs bids could make the differance between getting or loosing a job.As far as finding them, a reference would be best as there are a lot of guys out there that aren't quite up to par.

A.W.Davis · 12-12-2006, 10:25 PM

I guess having an insight of what my subs charge for jobs is something I will adapt in due time.

The begining is always the hardest

Mike Finley · 12-13-2006, 12:17 AM

If you are doing a lot of the same things it gets pretty easy. You said you are doing a lot of kitchens so for instance recessed lighting or under cab lighting is pretty standard. If your electrician charges X amount per can you can simply figure X * 20% or whatever mark up you want, maybe it comes out to $125 per can or something. That gives you a starting point for a customer that wants 8 can lights, then you just have to figure in some extras, new circuit, new switches, moving the switches...

Another thing that helps me is I just work something up based on known conditions. For example when installing a heated tile floor in this job I just got, we are removing a jetted tub so the cost of the floor was figured assuming that we could reuse the existing dedicated circuit from the removed jetted tub. However we won't know if the jetted tub was really installed properly and really does have a dedicated circuit until we start the job. If it isn't then the customer knows ahead of time that there will be a change order.

RobertCDF · 12-13-2006, 12:35 PM

Quote:

Originally Posted by house bldr

I know most GC's add to their subs bids,but when we build a house we get a firm bid [not an estimate!] in writing from all subs and pass on exactly that price to the customer no mark up.We don't make any money off subs but also don't loose any!There are times we have to play middle man between the sub and customer but kind of figure that into our part of the bid.I live in a rural community with pretty competative bidding and adding to all subs bids could make the differance between getting or loosing a job.As far as finding them, a reference would be best as there are a lot of guys out there that aren't quite up to par.

And then you just charge X amount per SQ FT or what? The GCs I know add to the subs price and that is it. EX: A builder friend of mine does cost plus 15%. So he adds 15% to everything related to the house. That is his fee no more money is due after that. I think he is leaving some money on the table using this system. He is very honest about it. He sends a copy of EVERY invoice to his customers.

house bldr · 12-13-2006, 08:07 PM

Quote:

Originally Posted by RobertCDF

And then you just charge X amount per SQ FT or what? The GCs I know add to the subs price and that is it. EX: A builder friend of mine does cost plus 15%. So he adds 15% to everything related to the house. That is his fee no more money is due after that. I think he is leaving some money on the table using this system. He is very honest about it. He sends a copy of EVERY invoice to his customers.

I build the house, just sub electric,taping,plumbing,sometimes painting.make my money doing the building, the subs are basicly just a courtuosy, I do the middle man work for free!

Gordo · 12-13-2006, 08:30 PM

Subs=cost + 30%. The M/U cover admin./scheduling fees.

If you are not charging for subs.......why not let the HO be the general and you be another sub?

house bldr · 12-13-2006, 10:17 PM

Quote:

Originally Posted by Gordo

Subs=cost + 30%. The M/U cover admin./scheduling fees.

If you are not charging for subs.......why not let the HO be the general and you be another sub?

That would be a nightmare,most ho's know nothing about it.I live in a small rural community and most builders are also the GC, so to remain competative everyone does it that way.Most HO's want a turnkey project they don't want to do all the footwork.Things around here are kind of slow but I manage to stay pretty busy.In my opinoin I can bid more competatively by not making money on my subs which means I can keep them busy,so they take good care of me also,everyone prospers!I make enough money on the building that I just look at the GC as part of the job.

Gordo · 12-13-2006, 10:24 PM

Quote:

Originally Posted by house bldr

That would be a nightmare,most ho's know nothing about it.I live in a small rural community and most builders are also the GC, so to remain competative everyone does it that way.Most HO's want a turnkey project they don't want to do all the footwork.Things around here are kind of slow but I manage to stay pretty busy.In my opinoin I can bid more competatively by not making money on my subs which means I can keep them busy,so they take good care of me also,everyone prospers!I make enough money on the building that I just look at the GC as part of the job.

Your way is your way. It sounds like you are making your sub M/U money as GC in the 'build' part of the job.

As a remodeler, things are a little different here. I break it all down in a scope of work/spec when we get the job. I must make money on the subs due to admin,/scheduling, etc. That is work too.

house bldr · 12-13-2006, 10:35 PM

[quote=Gordo;164389]Your way is your way. It sounds like you are making your sub M/U money as GC in the 'build' part of the job.

You are right! As a GC I can probably get away with charging a little more for the building than a sub could,I just don't reflect it that way.I gotta admit though, it does gripe me when I have to pick up my subs trash even with no mark up.

dougchips · 12-13-2006, 10:57 PM

House BLdr, I learned a while ago to state in my contract who is responsible for cleaning up and removing debris.

We install mostly doors&windows and mark up sub labor 25-30%.

A.W.Davis · 12-13-2006, 11:44 PM

great info as always, thanks guys!

RobertCDF · 12-14-2006, 12:05 AM

Quote:

Originally Posted by house bldr

You are right! As a GC I can probably get away with charging a little more for the building than a sub could,I just don't reflect it that way.I gotta admit though, it does gripe me when I have to pick up my subs trash even with no mark up.

I guess in the end if you are making the same amount of money. It does not really matter whether you classify that it comes from sub markup or what you charge to frame (build) the house. The key to this system though is that the PROFIT is still the SAME.

I can see where this system may "help" you a little bit. If a HO wants to do something that a sub normally would do, you still made your money from the "build" and you dont lose the markup from the HO sub.

But at the same time I can see some downfalls to it. You may be leaving some money on the table. And as you have already said you hate cleaning up after your subs when you are not "making money" on them. But personally I would backcharge the sub if he did not clean up and I had to do it. Weather or not I had a markup on him or not.

john elliott · 12-14-2006, 02:43 AM

Quote:

Originally Posted by RobertCDF

But at the same time I can see some downfalls to it. You may be leaving some money on the table.

If he is making the same profit as somebody who is marking up the subs, ie by charging more for his services than somebody who is marking up, why might he be leaving any more money on the table than the other guy?

John

house bldr · 12-14-2006, 08:40 PM

I can see where this system may "help" you a little bit. If a HO wants to do something that a sub normally would do, you still made your money from the "build" and you dont lose the markup from the HO sub.

I guess I never really thought of it like that but you are right,probably half our custumers do their own painting.Most of them regret it

Big Dog Dan · 12-20-2006, 05:26 PM

Quote:

Originally Posted by Gordo

Your way is your way. It sounds like you are making your sub M/U money as GC in the 'build' part of the job.

As a remodeler, things are a little different here. I break it all down in a scope of work/spec when we get the job. I must make money on the subs due to admin,/scheduling, etc. That is work too.

Saw your post and wondered if you guys can help me.
I am doing a large remodle (home) by the hour.
I hire subs to also work by the hour.

I furnish all tools and keep all materials on site.
I also work on the job, and GC every part.
I do not charge a percentage for materials, but get a good hourly wage.

Am I out of line to add $10.00 an hour to their hourly rate?
Thanks for any help on this.

A.W.Davis · 12-20-2006, 07:17 PM

Quote:

Originally Posted by Big Dog Dan

Am I out of line to add $10.00 an hour to their hourly rate?
Thanks for any help on this.

In my opinion that would be hard to answer based on the info provided! Maybe somebody else can be more helpfull

I dont know what you charge per hour, I charge $70 and thats cheap for a (legit) contractor here in Cali. I need to add 10 more bucks for me too

Gordo · 12-20-2006, 07:58 PM

Quote:

Originally Posted by Big Dog Dan

Saw your post and wondered if you guys can help me.
I am doing a large remodle (home) by the hour.
I hire subs to also work by the hour.

I furnish all tools and keep all materials on site.
I also work on the job, and GC every part.
I do not charge a percentage for materials, but get a good hourly wage.

Am I out of line to add $10.00 an hour to their hourly rate?
Thanks for any help on this.

I am assuming that the clients trust you. Here is how a typical senario will go when we do a T+M job. Note: We only do T+M jobs if the hours are difficult to estimate (termite/wood damage).

Hourly rate per man X # of hours + (materials x 30%) + (sub labor x 30%).

That is an easy formula and needs to be addressed up front with the client BEFORE work commences so there is no 'I thought this and you thought that'. Trust is KEY.

Big dog, why are you doing a remodel by the hour? Just curious.

Big Dog Dan · 12-21-2006, 06:42 PM

Hello
A.W.Davis and Gordo

A.W. wrote

"Sometimes your the windshield........sometimes your the bug"

Speaking of bugs on windshields,I was talking to my girlfriends daughter who was involved with several meeting with the State on Frog mutations and what the cause could be. (Some frogs are born with two legs etc.)
While chating with her in the parking lot where they park the state cars, she said they had just got back from a group meet way up north to go over notes and look for signs of other frogs that may have similar problems in the North Country.
While we were standing beside her and maybe 12 other state veiheles that had just returned from the meeting (90 mile round trip) I pointed to the front of here windshild and then to her bumper.
I was able to count 20-25 dead dragonflys, at least two dead birds in her radiator and thousands of insects wiped by windshild wipers, mixed with winshild wiper cleaner.
All total I estimated she killed 5lb. of insects and birds in just her car to drive north (90+ miles) to study the frog that someone said they found.
She said she only filled up once along the way.
Anyway you get the picture, and that was just her state paid car. She wanted to go home after that and we never got to the next car.

Anyway thanks for the help already.
I am on the east cost, and I have met people from the west cost that say why is everything so chep.

I charge $40.00 per hr. on this very difficult job. I have subs contractors who work for $30.00 and are good carpenters, but very slow while working by the hr.

The foundation was cracked, the interior walls were mold infested, the studs were warped.
I removed all the old carpet, and found old warn plywood. (looked like it was the main floor for years, until it finally wore so bad that they then put carpet on it. The wiring was a mess, the plumbing and heating could make a man cry.
I put in a new high efficacy boiler, with in floor heat. Old hot air furnace actually made the upstairs floors shake while it ran.
Insulation was only 2x4 and single pane windows were replaced with insulated glass.
Every part of job was unknown. even though I cut into walls and did heat loss etc.

The owner trust me, because of a reference where I did a very difficult job.
However after asking me to forward the job as fast as possible, they were shocked when the bill came. I was so busy working 12 hr. days that I was exhausted in the evening, and only wrote down the hours and what we did each day.
I did keep all the materials receipts, but I did not send the bill to them for several weeks.
During those weeks (that they asked me to increase my manpower), the total labor added up faster than when I just had off and on help.

Tonight when I received a small portion of the invoice, they said hold it for a day or so.
I said did you have money for this job, and they said no. However we have sold our boat.

I know this sounds like the old (I don't have the money,) but I think they do.

Is it me or am I stupid, or both? It seem a little strange for a job that has gone on and one as we keep adding more.
I did notice that big-ticket items were starting to show up at the house, but this is not suppose to be my business I am told.
I am just not too clear on this.
Any suggestions?

BTW I wonder why I did not receive a e=mail notice? I signed up to receive them.