How Do You Handle Owner Provided Scopes Of Work

Shark49

I started to ask this in another thread but figured best I start my Own:

I have a question concerning markup on kitchen cabinets, granite, or other scopes of work not contracted directly through you. I have a business relationship with a cabinet company that always refers me as the "go to" contractor when remodeling etc. As a GC you obviously have to spend time scheduling the cabinets and the periphery subs around them so your time is worth money. So how do you handle markup of the cabinet package if the Owner/client pays them directly? Some people "hide" the costs in other scopes of work based on the amount of time they are involved. Some put a "supervision" line item or simply put in their contract a 10% markup on all scopes not directly contracted through the GC. I realize there is not perfect or set way just curious how you handle it. And yes I know that you have to figure out the exact modifier value yourself based on your companies needs etc. etc. I want to know if you markup your scopes say 20% how much do you markup Owner provided scopes if at all? Some guys also use disclaimers and contract boiler plate, if you do please explain.

Mud Master

Easy.

If I'm managing any aspect it gets marked up, usually 18%-20% of the TOTAL value,not individually. IOW, I take all sub cost and add my mark up, than all material cost and add my mark up. Slap on my managerial fee if its not cost plus and there's my price minus any in house labor.

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Dan_Watson

Different for every job we do. Some jobs get marked up on subs and materials, others get it a managerial fee. I never hide it.

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greg24k

Are you a GC or GC "wannabe" who is looking to change or expand your trade field?

Before you ask this sorts of questions, you should fill in your location so people can give you a better advise based on the area you from.

With that said, I doubt you will get much advise how much you should mark up, that would be like asking how much I should charge... Best way to handle pricing and % of pricing is come up with a price that will work for you best in the area you're in.
Good luck

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EthanB

I provide a single number in my proposals so the actual markup technique or percentage is irrelevant as far as the customer s concerned. I've found that people can be very touchy about extra charges when they are providing the material. Most of the time they're providing the material in an effort to lower the cost of the project.

As far as amounts go, I still factor in a time charge for materials if I'm going to have to participate in selection, ordering and pickup or if the materials they pick are going to require more labor on my part.

Rough example: painting a room
Sherwin Williams = $65 paint + trip to the store = $100
Behr = $50 paint + trip to HD + more prep and slower painting = $175

Extreme example but you get the picture. I had a storm door take 2 hours to assemble BEFORE installation last fall.

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Shark49

I have actually mulled over doing this on my bids. I used to do a separate line item for Overhead and then Profit but often found myself having to explain these so started just putting a line item for "Fee" only. Same result less info. I've also done like you and have my markup already figured in a hidden column on right of my excel spreadsheets that only I see.

PowerWash

I would be careful emailing spreasheet estimates to customers. You can look at all the "markups" if they are not locked. We had a secretary that was very savy when I was building houses. She found some good information from my siding and window guys spreadsheet estimates that they were emailing to me when I was questioning why their prices were rising so much. The first couple of houses had 20% mark-up on material last one had 45% mark-up on material. It was a well designed spreadsheet and I used some of it for myself later, but made sure to use spreadsheets in house only.

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Shark49

I always convert it to a pdf first.

RemodelGA

Don't break out any of your markups on any quote. That will save you tons of hassle right there.

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