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Old 11-14-2018, 05:01 PM   #1
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Hey Professionals,

New guy here. Have spent some time browsing the forums for data on bidding/pricing techniques. I'm about so submit my first proposal and I'm pretty nervous.

I have gone over material takeoffs 3 times, I've had material quotes from 3 suppliers. I've included my indirect costs, overhead and profit. I don't know what else I can do.

I have 4 other Job's 2 bid with this GC. 2 of them are 1.5M(total) new construction homes, so I want to make sure I don't look like an idiot straight out of the gate.

What do you guys do to check your estimating before you submit? Sqft pricing? Or what did you do in the beginning? I imagine mostly compare to previous similar jobs.

Any helpful links to forum threads are appreciated. Thanks!
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Old 11-14-2018, 05:17 PM   #2
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You can always ask a peer (friend) to review your take off.


Many critical components of a bid are other than the actual work. Consider things like who owns it after you install it. What happens when thieves rip out all your home runs to buy crack? What if there's a fire? What happens when other trades damage your work? What happens to material delivered to the site but not yet installed if it gets stolen, damaged, etc. What are the draw schedules? How are change orders handled? T&M? What's the rate and what's the markup on the materials?
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Old 11-14-2018, 05:36 PM   #3
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Are there detailed electrical drawings?

Is all the lighting picked out?

The contract is critical - scope of work, payment schedule, and requirements, exclusions, disclaimers, warranties...

Just in case things go wrong - do you know how your local lien law works? You need consider this in your initial contract, it could bite you in the ass if you wait until there's a problem to try to pursue it.
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Old 11-14-2018, 06:12 PM   #4
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Gut feeling helps, along with a competent estimator and software.

Estimates are far from estimates. The GC, homeowner or whatever, will hold you to that price. It is a firm price to them so you need to make sure you feel good with the price and have covered all included and non included items.

Did you receive and read any specs. Those puppies can make or break your profit.

I know of one plumbing estimator that missed 2 drinking fountains per floor of a 4 story building once. The foreman didnít and it did hurt them a little.


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Old 11-14-2018, 06:26 PM   #5
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Its very easy for us. I refuse to do plan and spec work. Its a race to the bottom.
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Old 11-14-2018, 11:23 PM   #6
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Start SMALL and AIM HIGH.

You actually want to LOSE your early bids.

Your purpose -- at this point -- from the GC's point of view -- is to hammer down the OTHER GUY'S bids.

You don't want to be doing THAT.

Winning business solely based upon your price -- is a route to bankruptcy.

BTW, this is LATE in the business cycle. EVERYONE should be pulling in their horns.

I would not be surprised if the GC is getting static from his current roster of ECs about PAYMENT.

You're being invited in to cover his cash flow headache, of course.
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Old 11-15-2018, 01:21 AM   #7
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Maybe maybe not. It's a boomin economy.



Anyone asking for a bid should be checked out, I agree. But it's not by default a hairy situation just because the guy is asking for a bid.
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Old 11-15-2018, 06:35 AM   #8
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Our workload is have mech., half elec. The mechanical lead and I check each other all the time.

The hardest part of estimating is handling risk/contingency and small parts.

In terms of small parts instead of doing takeoffs down to the box eventually you just get to the point of estimating say $100 per receptacle and maybe some extra for fancy covers and that's it. Wire is so cheap per foot it doesn't matter on small sizes....It's the labor in the number of pulls and how long it takes to mount the supports if any and the box itself. When you have n easy job to track, keep track of this and the correct bid amount quickly becomes obvious. It's the work you do every day and saves a ton of time doing pointless detailed takeoffs.

Risk contingency is much harder because you are estimating unknowns. In our case we make money on the men about 80%. We miss the mark on some stupid thing that you can't usually catch about 10%. We still usually break even but we don't make money. Then there are the total misses that are usually our fault. For example recently our boss bid a job to do a PM and alignment on roughly a 5000 HP motor. These usually take 2 guys about a day and a half and it was out of town and new customer on a shutdown with lots of contractors so he estimated 2 days labor and bid 3 days. When the crew got there and asked which motor the maintenance foreman said start on the first and go through all 5. Somewhere in the emails the fact that it was 5 motors got lost. Needless to say we blew that bid up big time. If we didn't have the cash flow and didn't do tons of business with multiple plants with this company, we would have walked away instead of eating almost 2 weeks of labor.

We check ourselves by bidding on state government jobs where they post the bids afterwards. The spread is amazing. Based on the bids alone I have no idea how military contractors make any money. I know it's because of all the nonbid work they get too and playing the change order game but my boss won't do that. He wants to make money on every job. On state jobs I kid you not usually either somebody comes in and bids at a price where we would just break even or they shoot the moon and we come in at 25-50% less or else we lose it by maybe 10-15% which is our profit so if it's just paying ourselves we'd make money but we're a side business in reality. I'd say we lose probably 90% of military bids and 75% of state job bids. Often with government jobs after winning one we get a ton of nonbid work though.

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Old 11-15-2018, 06:48 AM   #9
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Couple other things, you should be prepared to lose money on this and chalk it up as a learning experience, the cost of learning residential. Try to do everything right but be prepared in case you miss, few hit it out of the park first time. Realistically there is a chance you'll come out of this upside down. I'm not even saying don't do it, just remember there's a learning curve and a cost to learning.

The schedule. It's been my experience, with residential construction, even if you are dealing with one of the good general contractors - rare - they don't manage the schedule AT ALL. Or you might say their method of managing the schedule is just a mix of begging, screaming, crying, demanding, threatening, and lying. I am trying to think and I am pretty sure I've never seen a Gantt chart on a residential job, not even multi million dollar residential jobs.

The only thing you can do to protect yourself is slide some language into the contract that prevents you from being roasted over the fire on schedule, so you don't wind up forced to do your work 16 hours a day on the weekends while other trades **** around and hold you up. Expect the general to push very hard to get your rough in done so they can get their rough in inspection draw.

Now I should say, I do very little residential work, just never took to it, I am wrapped way too tight for the residential construction circus.
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Old 11-15-2018, 07:13 AM   #10
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Quote:
Originally Posted by splatz View Post
Couple other things, you should be prepared to lose money on this and chalk it up as a learning experience, the cost of learning residential. Try to do everything right but be prepared in case you miss, few hit it out of the park first time. Realistically there is a chance you'll come out of this upside down. I'm not even saying don't do it, just remember there's a learning curve and a cost to learning.
Why would someone do something that has such a high risk of that happening? Why not go after the work that doesn't carry that risk? Seems crazy.

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The schedule. It's been my experience, with residential construction, even if you are dealing with one of the good general contractors - rare - they don't manage the schedule AT ALL. Or you might say their method of managing the schedule is just a mix of begging, screaming, crying, demanding, threatening, and lying. I am trying to think and I am pretty sure I've never seen a Gantt chart on a residential job, not even multi million dollar residential jobs.

The only thing you can do to protect yourself is slide some language into the contract that prevents you from being roasted over the fire on schedule, so you don't wind up forced to do your work 16 hours a day on the weekends while other trades **** around and hold you up. Expect the general to push very hard to get your rough in done so they can get their rough in inspection draw.
Another great reason not to get involved in it.

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Now I should say, I do very little residential work, just never took to it, I am wrapped way too tight for the residential construction circus.
Me too, I wouldn't be able to handle it. But I am only talking about that one horrible subset of resi work- new construction/major renovation for GC's/builders.
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Old 11-15-2018, 07:19 AM   #11
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Why would someone do something that has such a high risk of that happening? Why not go after the work that doesn't carry that risk? Seems crazy.

Another great reason not to get involved in it.
Very true but my point was only that you should be prepared to lose money your first time in just about anything, even if it turns out to be a great type of work once you know what you're doing.
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Old 11-15-2018, 09:36 AM   #12
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When I first started I would bid everything and then add maybe 30% or more just get a feel.
What I can tell you is I would not even think about touching a million dollar home in this day and age. They would expect me to do it for around $30K and it would cost me upwards of $50K I just didn't know it at the time.
Honestly one missed home run could cost you $5K. As a new contractor I would tell you to stay away from new resi construction. I learned that through experience.
You need to remember that GC's are salesman first.
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Old 11-15-2018, 09:55 AM   #13
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When I first started I would bid everything and then add maybe 30% or more just get a feel.
What I can tell you is I would not even think about touching a million dollar home in this day and age. They would expect me to do it for around $30K and it would cost me upwards of $50K I just didn't know it at the time.
Honestly one missed home run could cost you $5K. As a new contractor I would tell you to stay away from new resi construction. I learned that through experience.
You need to remember that GC's are salesman first.
They are scumbags second.
Irresponsible idiots third.
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Old 11-15-2018, 10:18 AM   #14
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It is common practice in government contracting to bid the job at a loss because they know they'll clean their clock on change orders.


It would be in government's interest to bid out the change orders first to short list who they want to accept bids from. Actually it would be in the taxpayer's interest. Government doesn't care generally speaking. It's not their money, only their budget. And they can always raise rates, fees, fines and taxes and sell more bonds. Must be nice.
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Old 11-20-2018, 04:22 PM   #15
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Not a lot of love for the resi work on here eh? I appreciate all of the feedback guys! its a helpful measuring stick for me for sure.

So here's what I did. Out of the 5 jobs they gave me to bid, I chose to only bid 2, so I can get a feel for how the GC runs work now. I didn't mention it in the original post but I've worked for them before under another contractor 4-some-odd years ago. Anywho, the're both 3 bed 2 bath 2,200 and 2,500 sqft one is a gut and rewire remodel+service change, the other is a new build. I got an old retired foreman of mine to check me on my takeoffs and labor units. Added up everything from each one twice and came out to around $8/sqft for the remodel and $7.25/sqft for the new build. Contract states that the GC is providing "all light fixtures" which I made a list of all the light fixtures and got the GC's rep to check yes/no in an email next to each one. Also labor to put those in is included. I'm not in contract yet, but they want to use me. Does this sound totally off base?

I'm trying to get in with another GC that does commercial TI's and some multimillion residential homes. In my immediate area, that seems to be the area in the market with the most work. So i'm starting there.
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Old 11-20-2018, 04:33 PM   #16
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Who does the demo on the remodel?
Gut 100% to the skeleton?
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Old 11-20-2018, 05:08 PM   #17
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I don't know if anyone posted this, it's a real good thread about residential and it even has a happy ending:

https://www.electriciantalk.com/f29/...-house-246417/

Quote:
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Not a lot of love for the resi work on here eh? I appreciate all of the feedback guys! its a helpful measuring stick for me for sure.

So here's what I did. Out of the 5 jobs they gave me to bid, I chose to only bid 2, so I can get a feel for how the GC runs work now. I didn't mention it in the original post but I've worked for them before under another contractor 4-some-odd years ago. Anywho, the're both 3 bed 2 bath 2,200 and 2,500 sqft one is a gut and rewire remodel+service change, the other is a new build. I got an old retired foreman of mine to check me on my takeoffs and labor units. Added up everything from each one twice and came out to around $8/sqft for the remodel and $7.25/sqft for the new build. Contract states that the GC is providing "all light fixtures" which I made a list of all the light fixtures and got the GC's rep to check yes/no in an email next to each one. Also labor to put those in is included. I'm not in contract yet, but they want to use me. Does this sound totally off base?

I'm trying to get in with another GC that does commercial TI's and some multimillion residential homes. In my immediate area, that seems to be the area in the market with the most work. So i'm starting there.
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Old 11-20-2018, 05:15 PM   #18
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Quote:
Originally Posted by dee12 View Post
Not a lot of love for the resi work on here eh? I appreciate all of the feedback guys! its a helpful measuring stick for me for sure.

So here's what I did. Out of the 5 jobs they gave me to bid, I chose to only bid 2, so I can get a feel for how the GC runs work now. I didn't mention it in the original post but I've worked for them before under another contractor 4-some-odd years ago. Anywho, the're both 3 bed 2 bath 2,200 and 2,500 sqft one is a gut and rewire remodel+service change, the other is a new build. I got an old retired foreman of mine to check me on my takeoffs and labor units. Added up everything from each one twice and came out to around $8/sqft for the remodel and $7.25/sqft for the new build. Contract states that the GC is providing "all light fixtures" which I made a list of all the light fixtures and got the GC's rep to check yes/no in an email next to each one. Also labor to put those in is included. I'm not in contract yet, but they want to use me. Does this sound totally off base?

I'm trying to get in with another GC that does commercial TI's and some multimillion residential homes. In my immediate area, that seems to be the area in the market with the most work. So i'm starting there.
Just remember that it only takes 1 job to go bad to turn a "great GC" in into the typical shyster GC that will lead you on for job and after job with no intention of paying you.
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