Bid management is part of Essential Key #3 and we take it very seriously. The bid your contractor presents is only as good as the level of detailed information provided by you.
Contractors know how to price construction materials and their installation. But when a contractor does not know the particular products selected by the homeowner, a guess is made, that guess is called an Allowance. This allowance is a placeholder for an unspecified item or group of items that the homeowner still needs to select. The number of undetermined products dictates the number of allowances. As the total dollar amount of allowances as a percentage of the total cost increases, the risk of the bid being invalid increases. Invalid bids tend to understate expenses, not overstate, thus exposing the homeowner to devastating cost overruns as the project proceeds.
A well specified and solid plan reduces or even eliminates the grey areas, guess work, and chances for misleading assumptions.
By removing these pitfalls, one avoids the avenue of disappointment from confusion, cost overruns and time delays. Detailed specifications and effective plans provide any good remodeler an excellent basis on which to estimate cost and time to completion. This is your ultimate goal.
When pursuing bid numbers, be mindful that the supply and demand curve of the regional building economy impacts the Bid request process. If general contractors/sub contractors are in demand – labor costs will come in at a higher rate.
‘A good price is only a great value if you are purchasing a quality product.’