To Disclose, Or Not Disclose....

d-rez

I stopped showing my line item break downs to clients some time ago. We have all talked about why this is a stupid idea. My standard responce, a la M. C. Stone- Propriatary info I am not at liberty to disclose. Okay, here's the scoop: I am bidding a job for an architect I want to do future work with, in a neighborhood I really want to work in. I present my bid to HO. Over their budget by tens of thousands, but they still want to talk. Arch calls me today and asks if I would provide a line item break down so they can see where money is going, also adds that the HOs wife's father is/was in construction and will be reviewing the proposal, and will want to see numbers. I explain most people are too ignorant to realize I am not walking with the GC fee, I have thousands of dollars in OH per year and do not want to disclose my break down. Arch says HO will feel more comfortable if they know where the money is going. I am torn, I WANT this job, I do not want to show break down. Thoughts? Thanks, -Chris

BreyerConstruct

If you don't... you most likely loose. If you do... you might win. Is it worth it?

Maybe don't go all the way down, but break it into sections/stages? Maybe offer to meet with the HO's dad, so he can "interview" you? His vote of confidence might be just what you/they need.

~Matt

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Bob Kovacs

Break the costs down, and spread all of your overhead and profit evenly across the line items. Also include a disclaimer that the breakdowns are for informational purposes only, and that changes in the scope of work will require a complete re-evaluation of the budget- you don't want the client's father trying to pull out the HVAC and electrical and have his buddies do those parts directly.

genecarp

line item, give it to them, broad strokes, not the full breakdown

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Mike Finley

There are some customers you will not be able to work for. That's life. You won't be happy when it's all over if you do business with them in a way that you don't do business. This will be a mess if you get the job, you will be fighting for every penny and they will take your every fight for profit very personally.

If daddy was a contractor he should know how it works. Sounds like daddy is an asshole. He doesn't need to know where the profit is, he should know there is profit and that's it. If he wants to make sure he's not being ripped, get another estimate to compare.

These demands can usually be diffused and set aside with a simple conversation, (with the client) the architect is arm chair quarterbacking you or C**k blocking you so to say.

I'd have a very short conversation directly with the client that you don't do business that way, same conversation you have had in the past and let the chips fly where they may. You'll never regret a horrible client that you never win.

orson

I'm with Mike on this one, if you break that bid down into even broad category line items you are going to get your balls busted on 2 or three specific categories.

"Why is the *insert job phase* so high? Why back in my day....."

You want to work with this architect in this neighborhood, but you sure as hell don't want to be known by this crowd as the contracotr that can be pushed around on price.

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Floordude

He is going to see what parts of the job he can do to save him some money. Put it to them on the itemized break down of services, that you will not install or warranty any work done over someone elses prep, PERIOD.

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Heritage

If it's cost plus you have to provide an "open-book" policy on everything. They have to see where every penny went/is going. But this requires a deposit.

If it's not cost plus then the only breakdown they get is by area:

Kitchen:
A. Description of work needed (Brief, i.e. Framing or Plumbing or Drywall)
B
C
D
E
Total cost: $...?

Bathroom
A
B
C
D
E
Total cost: $...?


If they want more details than that they have to pay for it. On cost plus jobs, where I detail absolutely everthing I usually receive a 10-20k deposit just to cover my time for drawing up their scope of work and budget.

I never ever ever provide a free estimate whenever there is an architect involved, my only free estimates are for small menial jobs and they only get a bulk price with nothing more than what I showed before.

They have no right to know how much profit you make unless you're just charging a percentage management fee.

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joasis

I would politely decline and just simple say "thanks for the opportunity to bid your project"...They may seek other bids, and they may respect your position, but I would not work over a bid to even generalize items or you will also giving them them the greenlight to try and negotiate point by point your original bid. Nothing good will come out of this in my opinion.

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Pearce Services

I would just give them lump sum pricing broken down in to categories, such as Plumbing $***x.xx, electrical $***x.xx etc. you may find that your cabinet price is much higher than they expected, now you know where to start educating them. You may find that the Architect carried unreasonable numbers for some things. Offer to show your break down, if they are willing to show how the architect broke his numbers down.

You can honor their request without showing your overhead and profit. You would be just hurting yourself to walk away from a job you want, in a neighborhood you want, just because of some philisophical concept that 5 years ago, you would never have even considered to be a problem.

If they become unreasonable after a breakdown, then walk, but you've done most of the work you are going to need to do already, now you just need to get them on board.

Tiger

You're putting yourself in a poor negotiating position if you WANT the job and neighborhood. Your best negotiating position is when you're willing to walk away. I have a knack for breaking a job down without giving away the details of my business. The trick is in grouping items. If it were a grocery list, I'd group the frozen vegetables, fresh vegetables, meat, dairy, canned goods, etc. It gives more information without giving away what they might really want to know...your hourly rate, markup of materials, and profit. I wouldn't hesitate to offer a breakdown, but I'd keep it something I could do quickly and it would be informal, not something like a menu they could drop items from as stated by another poster.

Dave

Tscarborough

It is not neccesary to provide line item bidsheets to value engineer a project. If the price is out of budget, sit down with the architect, the owner and the owners rep (good ol' Dad), and walk them through areas where in your opinion they can save money.

Keep good notes, and at the end of the meeting, tell them when you will have your revised bid ready and provide it to them at that point in your normal format. Do Not give any pricing at the value engineering meeting, just options.

This is standard procedure for this situation.

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d-rez

Thanks guys. Some more info: HO budget $120-150K. My proposal $215K. As I said, they still want to talk, in fact, we have a second meeting next week. I don't think the (out of state) father is being a A-hole, he just wants to make sure his girl isn't being taken for a ride(you would do that too). Conversely, if he is in construction, he should understand my position. I told the arch I might show my break down, but will add my OH into every line item, instead of having a seperate GC fee line at the bottom, as my spreadshhets are set up. I would never allow the HO/father to perform work on MY project.
I think it was Joasis who started a thread last week pertaining to cost plus. Someone responded explaining they would take 5%, and that all their supervisory time and office supplies were a direct cost of the project. I LIKE THAT way of looking at it! Heritage- how do you get a client to feel comfortable doing a cost plus contract? Do you list your time and OH as a direct construction cost, and the 'plus' part is your company profit? -Chris

TigerFan

Tell them that the money is going exactly where your contract says it is - to your company in order to complete their work.

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BMAN

I recently completed a church renovation that came in on budget on time. A week or two goes bye and they call and want a detailed final tally on what was spent where. I sent them the original proposal with numbers that did not change as we came in on budget. They said they wanted to know the nuts and bolts of it and I told them I don't do that, I don't want anyone knowing my cost of doing business but my accountant.

22rifle

I would not walk away from this one yet.

I strongly believe in complete transparency with clients. No, I am not talking about letting them see all my numbers. What I am talking about is letting them know you are concerned about disclosing proprietary numbers.

"Look, I want to do everything I can to make sure your concerns are addressed. But neither can I disclose all my proprietary numbers. That stays with me and my accountant. Here's the deal, if you will respect me on that, I will work with you to address your concerns. I would like to work with you and hopefully you feel the same about working with me. So let's sit down and figure this out together. And I might even be able to suggest a few ways we can get closer to your budget without sacrificing what you want or the quality of the work. Fair enough?"

Sit on their side of the table so to speak. But respect yourself enough to not let yourself get walked on.

You sound like a sharp cookie. Whether you get this job or not you are going to do fine.

Driller1

As soon as someone tells me they are a Christian I run for the road. I would never work for a church full of them!!!!

22rifle

While you are free to be a bigot, I am also free to call you what you are. A bigot.

(Now if you are talking about a person using their status as a Christian to get you to give them a deal, etc. then I am with you. That isn't bigotry, that's just walking away from rotten eggs.)

MALCO.New.York

Anyone who wears their Political, Religious or Sexual affiliation an their sleeves are the BIGGEST BIGOTS to be had. When someone tells me that they are so and so or this or that, I run for the hills because objection and self-righteous indignation will be coming at me soon.

Just MY experience. Nothing Bigoted about it. I was once a Bible Thumper. That was before I understood who I am. Again, just MY experience.

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Driller1

Yep, that is the way I see it.