Common Quandaries in Pricing Your Project

Conventional wisdom tells us that we should always get 3 bids for any work that we want to have done on our home.  Convention doesn’t really explain what that means.  If the work that is being done is “single trade” work, then getting 3 bids would involve defining the project by documenting the specific tasks, materials and constraints and sharing the information with the chosen audience in a “request for quote”.  The request should ask the bidders to document all that is “in scope” and “out of scope” in their quotation.  The quote should also include a start date, a completion date and a general schedule of when and how the work will get done.

So, what does the “in scope” and “out of scope” look like?  A proper scoping document is detailed with specifications for the materials type, quantities, placement, performance requirements and any constraints.  For instance a scope document for painting would indicate the number of colors, the placement of each color, the paint finish type (flat, eggshell, high gloss, etc.)  It may specify a brand and a requirement that the paint is low VOC (volatile organic compounds). The document would reflect whether the trim and ceiling was to be painted and what color applies.  The bid should define the materials in as much detail as possible.

For bigger jobs, where you need expertise that spans a multitude of trades and someone to coordinate and schedule the series of activities, a general contractor is essential.  The general contractor spans the “white space” that exists between the silos of vendors, trades and craftsmen.  In the selection of a general, your comfort and trust in their expertise, processes, and communication style is at least as important as your confidence in their pricing.  You will want to determine how they will charge you. The bids should be a part of their process and it may or may not make sense for them to go out for bid on every line item in assembling your pricing and selecting the trades and craftsmen from their portfolio of providers.  In seeking a request for quotation from a general, the approach is typically iterative and will require some collaboration on your part with them to help define scope.

As the owner, to the extent that you do not define what you want in your project, you are leaving the decisions up the contractor for the bidding purpose.  You can be guaranteed that each of the contractors you engage to provide a quote will interpret your plans and objectives differently; therefore you will not have comparable bids. The point here is that without specifying what you want in your home (scopes of work for each phase/item of the project), getting three bids doesn’t really get you what you want, which is three bids for a comparable outcome.  So, you need to do your homework before giving your plans to general contractors by producing scopes of work clearly defining what is in scope and what is out and what materials you envision.  Additionally, if you have any specific constraints or requirements, you should indicate those as well.  The general contractor is adept at simplifying this very complex process and helping you to value engineer your plan to meet your goals and objectives.  Look to your general for guidance in how to accomplish your goals and stay on budget.