Custom House Bid: Show The Fee Or Hide The Fee? - Business - Contractor Talk

Custom House Bid: Show The Fee Or Hide The Fee?

 
Thread Tools Search this Thread Display Modes
Old 01-08-2015, 04:03 PM   #1
Registered User
 
RMB48's Avatar
 
Trade: Residential
Join Date: Mar 2014
Posts: 15
Rewards Points: 32

Custom House Bid: Show The Fee Or Hide The Fee?


Bidding a custom house and providing a schedule of values. Do you typically show the fee or do you break it down to a % and add that to each line item?
RMB48 is offline  

Warning: The topics covered on this site include activities in which there exists the potential for serious injury or death. ContractorTalk.com DOES NOT guarantee the accuracy or completeness of any information contained on this site. Always use proper safety precaution and reference reliable outside sources before attempting any construction or remodeling task!

   

Advertisement

 

Old 01-08-2015, 06:21 PM   #2
Pro
 
AllanE's Avatar
 
Trade: Home Builder
Join Date: Apr 2010
Posts: 256
Rewards Points: 655

Re: Custom House Bid: Show The Fee Or Hide The Fee?


I assume this is a fixed price contract, not cost plus? I calculate my jobs with a gross profit which includes my net profit + G&A (supervision, General Conditions, whatever label you want to use). I have a line item for this and a line item for net profit. Or I might bury some of the G&A/supervision in each line item. This all shows net profit lower than gross profit.

Allan

Advertisement

__________________
http://aedwards.com
AllanE is online now  
Old 01-11-2015, 02:59 AM   #3
Pro
 
pcplumber's Avatar
 
Trade: Eight Specialty Trades
Join Date: Oct 2008
Location: Los Angeles
Posts: 2,247
Rewards Points: 1,350

Re: Custom House Bid: Show The Fee Or Hide The Fee?


The only thing we show in the Schedule Of Values is the portion of work that is performed. That portion can be either a portion of the entire job, or a portion of a specific portion of the job i.e. if we are installing file lines, water lines and gas lines we can bill for a portion of the gas lines that are completed. The schedule of values could include a portion of a high-ticket item i.e. when we install a lift station that cost of $60,000 we could put this item in the Schedule Of Values and request 100% of the money when the item is delivered to the job site minus any retention.

If a job is $300,000 a Schedule Of Values would say:

Gas piping $$50,000
Water piping $100,000
Sewer $50,000
Storm Drains $100,000

When we request a draw we could request

Gas piping 50% = $25,000
Water piping 40% = $40,000

and the general or owner will check to make sure that percent of work is completed before they make a payment.

We do not include the cost for materials, labor nor other expenses in a Schedule Of Values.

We submit a Sworn Materials Statement on most large jobs and this has to be notarized. This statement includes a list of all costs for the entire job and the total is broken down by every supplier. We don't put small ticket items on this list i.e. Home Depot supplies because we personally don't purchase a large amount of supplies at Home Depot and we don't have a charge account with Home Depot. We don't include permit fees. The purpose for this statement is so the general contractor or Owner can make sure that they get the proper lien releases from every supplier. Otherwise, subcontractors would make believe their materials costs are less and after the job is finished the Owners would get both bills and liens from suppliers that were partially paid and suppliers they were unaware of.

On most jobs we have to furnish daily reports regarding the number of hours our employees work, their names and this report includes a cumulative man-hour total.

In the end, the general contractors know fairly close how much a job costs and how much profit we make and they probably know more than I do, but I don't care what they know as long as I get what I want out if the job. I have never had a problem giving the papers they request because they have good reasons regarding why they want the paperwork.

I recently did a job for a customer for $7,000. The materials cost me about $600, labor was $1400 and my profit was $5,000 for one day of work. Later, the customer realized they had insurance and their insurance company requested a breakdown for the job. I broke the job down and sent the costs to the insurance company as they requested because the insurance company wanted to calculate what percent they would pay based on the homeowner's policy. If they need it they need it.

Recently, we had a general contractor request that we include a breakdown for all materials in the Schedule Of Values. On this job we used thousands of pieces of material and it is virtually impossible to create this list and then include and account for the balance of all materials and their costs. It would take a forensic accountant, a team of office workers and it would be senseless. We told the general contractor that we would not break down all materials and he backed off.

The Sworn Materials Statement is something fairly new for us and it is a redundant protection for the Owners because the Owner will be aware of the total cost for materials after they receive Preliminary Notices from suppliers and laborers. The problem is the Owners won't know the total cost for materials until after the materials are delivered and not until after they receive Preliminary Notices and this can take several months and up to nearly the end of the job to receive all the Preliminary Notices. Only you know the total cost you estimate that you will spend and this is why the Owners want the Sworn Materials Statement to be notarized.

Last edited by pcplumber; 01-11-2015 at 03:36 AM.
pcplumber is offline  
Sponsored Links
Advertisement
 
Old 01-19-2015, 02:46 PM   #4
Pro
 
Cnrhodes's Avatar
 
Trade: Carpentry/General Contracting
Join Date: Jun 2013
Location: Bayfield Colorado
Posts: 119
Rewards Points: 197

Re: Custom House Bid: Show The Fee Or Hide The Fee?


I always have a line Item for GC FEE and Supervision. It give the prospective clients a sense of trust knowing that everything is visible and not hidden under other line items.
Cnrhodes is offline  
Old 01-19-2015, 03:28 PM   #5
Pro
 
Agility's Avatar
 
Trade: Carpentry; Kitchen & Bath Reno
Join Date: Nov 2013
Location: Southern Maine
Posts: 1,308
Rewards Points: 1,016

Re: Custom House Bid: Show The Fee Or Hide The Fee?


Quote:
Originally Posted by Cnrhodes View Post
I always have a line Item for GC FEE and Supervision. It give the prospective clients a sense of trust knowing that everything is visible and not hidden under other line items.

I word mine very similarly for large jobs. It says "Profit and Overhead (GC Fee)" and I tell people it's what it costs for me to be more than a carpenter.

I think explaining my markup helps sell the job because "it's a small price to pay to make sure everything is done right and on time."
Agility is offline  
Old 01-19-2015, 04:48 PM   #6
Gen. Contractor
 
Ninjaframer's Avatar
 
Trade: Residential Light commercial
Join Date: May 2011
Location: Utah
Posts: 3,194
Rewards Points: 2,610

Re: Custom House Bid: Show The Fee Or Hide The Fee?


I show 80% of my GC fee on a profit and overhead line. The rest I bury on non-selectable line items. That way it looks like I'm cheap and my subs are expensive.

Advertisement

__________________
"slow makes smooth, smooth makes fast"
Ninjaframer is offline  
The Following 2 Users Say Thank You to Ninjaframer For This Useful Post:
CarpenterSFO (01-19-2015), Spencer (01-19-2015)


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Grading & base InterCounty Masonry 8 06-11-2013 10:11 PM
Custom Cabinet Builder looking for work customcabinet Help Wanted or Looking For Work 0 01-16-2013 10:04 AM
Custom Steam Shower Dayton Ohio ohiohomedoctor Kitchens & Baths 13 12-27-2012 11:38 PM
Help with remodel...house is sloping...no budget for underpinning or lifting. asevereid Carpentry 40 09-30-2012 07:32 PM
200 year old house resto/reno blackbear Carpentry Picture Post 38 08-27-2012 09:25 PM

Join Now... It's Fast and FREE!

I am a professional contractor
I am a DIY Homeowner
Drywall Talk is for
PROFESSIONAL CONTRACTORS ONLY!

At DrywallTalk.com we cater exlusivly to professional contractors who make their living as a contractor. Knowing that many homeowners and DIYers are looking for a community to call home, we've created www.DIYChatroom.com DIY Chatroom is full of helpful advices and perfect for DIY homeowners.

Redirecing in 10 seconds
No Thanks
terms of service

Already Have an Account?