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

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Old 01-08-2015, 04:03 PM   #1
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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?
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Old 01-08-2015, 06:21 PM   #2
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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.



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Old 01-11-2015, 02:59 AM   #3
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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.
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Old 01-19-2015, 02:46 PM   #4
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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.
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Old 01-19-2015, 03:28 PM   #5
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Re: Custom House Bid: Show The Fee Or Hide The Fee?

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."
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Old 01-19-2015, 04:48 PM   #6
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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.


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