Homework and Bids

This article is the third in a four-part series that consumer advocate, Richard Connolly published in the Boston Sunday Globe in September, 1991. Although that time seems long ago, little has changed, as you will soon discover.

Remodeling? Do your homework when inviting bids

Richard Connolly

Boston Globe Correspondent

Once the designs for your project have been completed and approved by the building department, the next major milestone is obtaining competitive bids.

To avoid bids that differ radically from one to another, provide the submitting con­tractors with information that is as precise as possible, including the names of manufacturers and the model numbers of various products you intend to use in your project.

Secondly, indicate amounts and grades. Saying, “Over vapor barrier, install 1,288 lineal feet of ½” x 6” red cedar clapboard, clear, vertical grain, rough side out, four (4) inches to the weather, using steel nails,” is better than “install clapboard siding.”

Lastly, identify work for which an optional price is required. For example, “In cathedral ceiling of new addition, frame an opening for skylight to be installed by home owner at a later date. Price framing optional.” Cryptic language is acceptable as long as it is clear.

This modular approach helps control costs because it allows you to include or exclude items as your budget warrants. You can request optional prices for major components you may want to finish later, such as a bathroom.

In short, the more precise the information – including work you will be doing yourself – the greater the likelihood that all the bids you receive for the project will be competitive. Also, the chances of a misunderstanding later are greatly reduced.

By controlling all the variables and excluded and optional work, you allow the contractors to bid on “apples for apples and oranges for oranges.” Consequently, you should have a lot more confidence in the bids.

Before you submit your plans and specifications for bid, decide whether you want to hire a general contractor or perform that function yourself. Most homeowners who act as their own general contractors usually do so to save money in exchange for their time.

Although the amount of money you may save is debatable, the time is not [unless you have professional help]. You need plenty: before and after work, weekends, holidays, vacations, and any other waking moments you are not thus involved – before the project starts, while underway, and when finished.

In any event, you provide your plans and specifications to a sub or general contractor, also known as the G.C., who must have a construction supervisor’s license.

A subcontractor is an independent, specialized tradesperson, such as a framing carpenter, electrician, plumber, or mason. Generally, they hire employees to do the actual work or may work with them. The subcontractor makes his or her money by providing labor and materials that are marked up by a percentage that varies widely.

Although electricians and plumbers receive extensive training and must be li­censed, many others do not. In either case, movement from one subcontractor to the next, sometimes for more money, opportunity, or work, is common.

Subs typically work under agreement with general contractors to provide specialized goods and services. This relationship can be loose or formal, depending on several factors, especially the number of years the two have worked together.

General contractors in residential construction are usually small business persons who may be involved physically in the work. One advantage to their doing so relates to quality control. The G.C. makes his or her money by marking up at a percentage all the labor and materials for the project but earns it by planning, scheduling, and executing the work.

According to conventional wisdom, the general contractor is only as good as his or her subs who, in turn, it should be added, are only as good as his or her employees.

Locating sub or general contractors is easy: look in your local Yellow Pages, classified ads, [or use an online service provider site]. One advantage to hiring a local professional is that he or she may know the ins and outs of the building department better than someone from another town.

Submit your plans and specifications to no fewer than three to five sub or general con­tractors. Three bids will tell you exactly what you want to know: who is high, who is low, and who is in the middle. Four will give you insight. Five will make you a savvy consumer.

Give the bidding professionals guidelines as to what you expect from them. If there are special requests that you have – such as instructions on where to park trucks and the use of facilities – make them known.

Provide them with your telephone number and times when the contractors can reach you. Lastly, set a closing date for the return of all bids.

If you are hiring a general contractor, request a preliminary interview. Ask for a resume, any literature he or she may have about the company, a portfolio, a list of references, and a sample contract with change orders. Inform the contractor that another interview and more information is required before a contract signing.

Prepare a list of questions to cover with each contractor in the first interview. The questions should help you understand the manner in which the contractor runs his or her business. This goal is central to your hiring a contractor with whom you can get along. A first rate business results in a first rate project, not the reverse.

At the top of the list for a general contractor should be questions that apply to him or herself and all his or her subcontractors, such as licensing requirements, Worker’s Compensation, Liability Insurance, and Certificates of Insurance.

You may also want to know if the contractor will be physically involved in your project or supervising others while yours is underway. Ask about his or her hours of operation and policy on changes you request.

You should also cover the subject of how instructions are communicated to the workers. While the construction is underway, it is tempting for the homeowner to instruct a worker to make a change without remembering to inform the contractor.

Several other questions to consider are: How good are the contractor’s interpersonal skills? Is he or she a good listener? Does he or she give or take directions well? How well organized and professional is the contractor? Does he or she pay close attention to details?

Once you have received all the bids, compile and compare them. Expect to make a few phone calls for further clarification and evaluation. Another point of conventional wis­dom, “Never take the low bid,” is subject to question.

If you have done your homework correctly and provided and requested precise information, there is really no reason why you should not take the low bid. To do otherwise could be an expensive proposition, especially if you are acting as the G.C.

Check references – at least 5 – but ask everyone the same questions. A visit to several projects done by the contractor, if possible, for a first hand impression would be a good idea. Find out whether the subs changed frequently from one project to the next.

Contact the successful contractor for a second interview. Ask about a payment schedule and form of payment, site management, storage of materials, contractor and supplier warranties, miscellaneous charges not related to the plans and specifications, and whether there is agreement on the basic and optional charges for the work.

Resolve ambiguities.

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