This book should be required reading for every builder and tradesmen in America. Jim Fleming, carpenter/GC 40+ years

Monday, December 25, 2017

thoughts on bidding

It is curious that so many professionals charge by the hour—lawyers, therapists, auto mechanics, even portrait painters—but most contractors are expected to give a fixed price for their work, and, the larger and more complex the work, the more often a fixed price is required. This despite the fact that the fixed figure is often inflated to make up for the unknown, that it is not really a fixed price because of change orders and allowances, and that time and material or cost plus would be often far better for the client and the builder. 

In situations where the product is fairly standard and the contractor does nearly the same work over and over again—sunroom, replacing windows, shingling a roof for example—a fixed price makes sense for both the client and the contractor. But this is true only because the specifications are fairly standard and thus the pricing is known. The more complex the job the less fixed pricing works to anyone’s advantage.

Some of the reasons clients expect fixed prices:

      ~ Builders are willing to give them.
      ~ Historically this is how it is done.
      ~ Clients expect them.

There are enough bad contractors that clients don’t trust the industry (although some of the responsibly for this falls to clients for hiring based on the lowest price). The importance of detailed and precise specifications and drawings is poorly understood by the customer and, amazingly, even by many builders.

There is much more in EOB on the subject of bidding.

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