Getting Construction Bids

Our focus in this section is getting construction bids, the process of obtaining contract proposals for each area of work to be done on your project. The same principles will apply to getting material bids from your suppliers.

The owner builder's job, as you will remember, is to "manage" the project, not do the actual work. Spending time swinging the hammer takes time away from management duties and potentially can cost money. That is the last thing you want when building your own home.

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Three Bids MINIMUM!!

The general rule is to obtain a minimum of three construction bids for each subcontractor task. This is sometimes set aside by builders after relationships with contractors and suppliers are well established. A comfort level is reached when builders begin to do higher volume and their timelines tighten. It is easier and less time consuming to go with someone you know and trust than to "shop around". Fortunately, for the owner builder, that isn't an issue. We are concentrating on one project and getting it right.

Once your blueprints are complete, get 5-10 copies made. The more copies you have, the more quickly they can be distributed to trade contractors. How many is a judgement call and may be limited due to budgeting constraints. If you are able to get the copies reasonably, it will save time to get more, but they tend to be fairly pricey.

There are some steps you can take to jump start the bid process. You can begin as early as during the lot selection phase, visiting jobsites and talking to contractors in the area. Any time you meet someone involved in construction, get a business card and begin to build your rolodex. Be open with general contractors, let them know that you intend to build a home and ask about their subs. Some builders would love to get their subs extra work to bridge the gaps between their jobs.These trade contractors will definately be good prospects for obtaining construction bids. Be sure to have a good floorplan selected and working drawings before attempting to get construction bids.

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Interviewing Trade Contractors

As D-day approaches, contact the trade contractors in your rolodex. It is good to interview them on the phone. Some questions that you can ask are:

How much lead time will you need to have crews on my job?

How many days will it take to finish?

Will you commit to a timetable for finishing?

What do you need from me to ensure on time start and finish?

Are there any contractors you know that I should contact for bids?

Are you fully licensed and insured? Can you provide that information and certificates with your construction bids?

Set up a time to meet potential trade contractors with the project blueprints. Once you recieve their bids, review them carefully, side by side, with others. You have a minimum of three estimates per task, correct? Break each bid down comparing them item by item: labor, materials, extra work, upgrades, etc. One contractor may include work that another considers an extra. Take that into account. If a contactor has bid a project but hasn't included certain items you want done, give them the opportunity to revise their bid.

It is imperative that you have verified licenses and insurances for those who are giving you construction bids. This can be a sticky subject. Sometimes the owner builder has a relative or friend that is an experienced tradesman. The unfortunate truth is that, more often than not, having a friend or relative do trade work on your project will often end badly. Misunderstandings and disappointment in performance can permanently damage relationships. Deliberate thoughtfully before awarding construction bids to friends or relatives. If you do proceed in this direction, be sure to have specific, written and contractually binding directions for employment on your project. Let there be no confusion about what is expected.

See some important items to consider when getting your framing bid.

Ethical Treatment of Subcontractors

Some contractors suggest that the owner builder should take the lowest bid in each area and use it to bring down the price of other bidders. We discourage this. A trade contractor or vendor has spent time reviewing your plans, doing measurements, writing up take offs, and crunching numbers to put together a proposal in good faith. If they have the best number and have done the work up front to get there, a contractor shouldn't have to worry about a client shopping their bid to competitors who can simply undercut the price and get the project. It just isn't fair to the subcontractor.

While this is accepted in some circles, you can see why many trade contractors despise the practice. You should definately feel free to negotiate with potential trade partners as you see fit. That doesn't mean you should "shop" your construction bids.

Consider this example:

As owner of Acme Drywall you have reviewed Mr. Smith's plans. It took you four hours. After the plan review, you logged onto your computer ( late in the evening because you were in the field all day ) to draw up a proposal. After your first draft, you revisit your numbers. Mr. Smith's house is large but has a fairly simple floorplan. Your crews will be able to hang sheetrock more quickly due to the simplicity of the layout. Acme can lower the price by 500.00. You rewrite the proposal. By now, you have 6 unpaid hours into the Smith job.

The next day you drive into town to meet Mr. Smith, return his plans and give him the product of your efforts. Then you wait. The following Friday there is a message on the office phone. Bubba's Drywall has been awarded the contract. "That's business." you think to yourself,"I though my numbers were very good. Generally, my prices are better than Bubba's." You find out much later that indeed, Acme did have a better proposal but lost the contract. Your competitor didn't do the neccessary work to win the with his intial proposal. You did the work for them and it was handed to them. Mr Smith took your offer to Bubba and showed him. Bubba simply said he would do it for less. It would definately leave a bad taste in your mouth and for good reason.

Remember, trade contractors are business pros too. Treat them as such and show them the same respect that you would expect to be shown.