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Estimating Question For GC's Doing Broad Scope Of Work

 
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Old 09-21-2006, 02:01 PM   #1
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Estimating Question For GC's Doing Broad Scope Of Work


Do you get firm written prices from your subs before figuring the price for the customer?

This is something we're going to start doing, and I was wondering if it's the norm. I feel kinda stupid that we haven't been doing this all along. Usually we're about right on, but sometimes we're off $150 bucks or so, which is such a waste and can be prevented.

Also, do you shop around or stick with one sub for each specialty and trust that his prices are fair?

How acurate are you in figuring material costs? What method do you use? A program? Yrs of experience? Do you keep track as you're doing the job, or check after it's complete that you're prices were right on?
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Old 09-21-2006, 02:44 PM   #2
 
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Re: Estimating Question For GC's Doing Broad Scope Of Work


Quote:
Originally Posted by Melissa View Post
Do you get firm written prices from your subs before figuring the price for the customer?

This is something we're going to start doing, and I was wondering if it's the norm. I feel kinda stupid that we haven't been doing this all along. Usually we're about right on, but sometimes we're off $150 bucks or so, which is such a waste and can be prevented.

Also, do you shop around or stick with one sub for each specialty and trust that his prices are fair?

How acurate are you in figuring material costs? What method do you use? A program? Yrs of experience? Do you keep track as you're doing the job, or check after it's complete that you're prices were right on?
WHEN I was still a GC, yes... I got a firm price from at least 3 subs before closing out that system (plumb, elec, etc) then I would count up job costs (dumpster, helpers, etc) before I came up with a price. I normally would call subs that worked out good back but, like I said in another post the top and bottom bids would instantly end up in the trash. Last part, wood, rock, etc change price on demand, so ya I would run through a parts list every job and lock in the price of materials on signing, buying everything at once. That's prolly why your off 150 sometimes, a 2x4 can change price by 20 cents in a week at times.

Oh, btw I was a buildout and renovation GC, not a new home builder, those guys have a tighter budget.

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Old 09-21-2006, 03:11 PM   #3
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Re: Estimating Question For GC's Doing Broad Scope Of Work


I use the same subs for my jobs and usually try to get a price for each job. Lotsa times I have to throw a number at a job and I'm usually pretty close. I think it's part of the job, unfortunately. Some of my subs let me know how they bid (sg ft etc..) so I can bid for them. Others are different every time. It all seems to work out in the end. Of course it would be best in a perfect world to have every single item priced correctly, but is that ever possible?
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Old 09-21-2006, 03:51 PM   #4
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Re: Estimating Question For GC's Doing Broad Scope Of Work


Quote:
Originally Posted by Melissa View Post
Do you get firm written prices from your subs before figuring the price for the customer?

This is something we're going to start doing, and I was wondering if it's the norm. I feel kinda stupid that we haven't been doing this all along. Usually we're about right on, but sometimes we're off $150 bucks or so, which is such a waste and can be prevented.

Also, do you shop around or stick with one sub for each specialty and trust that his prices are fair?

How acurate are you in figuring material costs? What method do you use? A program? Yrs of experience? Do you keep track as you're doing the job, or check after it's complete that you're prices were right on?

The GC I work for has been around long enough and has established a relationship with his subs, so he always knows the ballpark of what they are going to quote, but yes - we get firm quotes that no one budges on for work. The only time a subs quote is altered is if there is the need for additional work due to unforseen ( ie: rot repair)circumstances, but then we would get a change order and again, adjust numbers. For large jobs (additions, new house) we give the plans to our materials supplier and they quote the materials. Each sub gets a copy of the plans as well, for quoting. Like I posted under the Receipts thread, this info is tracked in quickbooks and can give you a pretty accurate P&L per job.
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Old 09-21-2006, 03:53 PM   #5
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Re: Estimating Question For GC's Doing Broad Scope Of Work


I think that changing subs all the time might be counterproductive to a certain extent. Developing a rapport with your subs takes time, and once they learn how you like things done on your projects, you don't have to "break in" a new one. If you find a sub that gives you a decent price on one or two projects, and you get along, chances are really good that his prices on future projects will also be fair. I tend to not treat GC's as well when I know that they are shopping every project they do. It's certainly their right to do so, but I don't have to pretend like it's okay with me.

I have no problem giving a GC a firm price, if that's what they want. For residential new work and small remodeling projects, there's no reason in the world why the price can't be firm. There isn't much in residential work (new or old) that should completely blindside an experienced sub such that it would effect his price that much.

Last edited by mdshunk; 09-21-2006 at 03:55 PM.
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Old 09-21-2006, 03:56 PM   #6
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Re: Estimating Question For GC's Doing Broad Scope Of Work


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Originally Posted by mdshunk View Post
I think that changing subs all the time might be counterproductive to a certain extent. Developing a rapport with your subs takes time, and once they learn how you like things done on your projects, you don't have to "break in" a new one. If you find a sub that gives you a decent price on one or two projects, and you get along, chances are really good that his prices on future projects will also be fair. I tend to not treat GC's as well when I know that they are shopping every project they do. It's certainly their right to do so, but I don't have to pretend like it's okay with me.

I have no problem giving a GC a firm price, if that's what they want. For residential new work and small remodeling projects, there's no reason in the world why the price can't be firm. There isn't much in residential work (new or old) that should completely blindside an experienced sub such that it would effect his price that much.


Ditto That
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Old 09-21-2006, 04:16 PM   #7
 
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Re: Estimating Question For GC's Doing Broad Scope Of Work


You should probably build in a 5% buffer on your contract price. After you get your figures and your subs figures and get a final price add 2%-5% as a buffer. how much depends on the job.

Many GC's around here, on real big jobs, request that subs submit a bid with a 2% buffer in case materials go up or you forgot something.

It's better to have a little extra when the job is done then to lose some or all of your profit.
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Old 09-21-2006, 05:59 PM   #8
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Re: Estimating Question For GC's Doing Broad Scope Of Work


Quote:
Originally Posted by Melissa View Post
Do you get firm written prices from your subs before figuring the price for the customer?

Usually we're about right on, but sometimes we're off $150 bucks or so, which is such a waste and can be prevented.
A $150.00 misfigure on a $1500.00 dollar job that is subcontracted is a miss of 10%. Way to large to absorb. Keep this up and you'll be out of business in no time.

That 10% can be your overhead costs or profit for that portion of the job.

We get firm estimates from our subs and we usually do not shop the price. We're more interested in quality and consistency than a low price.

Like Peladu's Guido, look for a sub that cares about his work and craftsmanship and is proud to put his work alongside yours. Shopping for subs can be a full time job in and of itself. Once you find one you can work with and does good work, stick with them.

Materials over $350.00 we get firm quotes from suppliers. We do all material take offs in house, and our subs order their own materials most of the time. We'll supply on rare occasions, such as fixtures, floor covering, new products we'd like them to try.

In fact, MDShunk got our electrical subs using those nifty Arlington 'In Boxes'. They hadn't seen or heard of them so I ordered a couple online to use on a small addition. They loved them and so did the client.

Mr. Daniels oldest boy told me to tell MDShunk "You're a minor f***ing demi-god!" He really liked the box.

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