Construction Bids and Quotes

By Tim Carter
©1993-2010 Tim Carter

Summary: Construction bids can be confusing if you are comparing one to another. Sometimes one contractor is listing different things than the other. Sometimes you have trouble getting construction bids from a contractor at all. And, why is the price so high? Is it all profit?

DEAR TIM: My wife got an estimate from a small contractor to replace seven windows at our home. The new windows are a major name-brand with wood interior and aluminum cladding on the exterior. He was also going to install new interior trim and restore the exterior trim. The price of the quote was $5,725.00. It seems outrageous to me, but my wife loves the quote and thinks this man is the greatest. I tried to get other quotes but my wife says I scare contractors as they never return my calls. What should I do? What is a fair price? Gary K., Trenton, NJ

DEAR GARY: I'll bet this exchange between husband and wife happens tens of thousands of times each day in the USA. I am constantly flooded with phone calls and emails from people who have all sorts of trouble analyzing quotes from contractors. In many cases, some people would be ecstatic even getting a bid. Believe it or not many people each day wait for the elusive contractor to show up, and even when they do show up to look at the job, some never call back with a quote. Consider yourself lucky that you even got a bid.

Window replacement is not always as easy as it looks. Taking an old window out and installing a new one is just one part of the overall job

There are many reasons why some people think a contractor's price might be high. One of these reasons, I believe, is the proliferation of do-it-yourself information that is flooding consumers on television, on the radio, in magazines, on the Internet and even other newspaper columns such as this. All too often difficult jobs are depicted as being no problem or easy. I know what happens before, during and after each installed window replacement job.

First of all let's think about this small contractor's business. He needs to have all sorts of tools, a truck and a place to house his business. Saw blades, tools and his truck need maintenance and parts and they eventually wear out. These costs must be apportioned to each of the jobs he completes. If he is a contractor that offers free estimates, the time spent doing this work activity must be applied to those jobs he eventually gets under contract. After all, you don't go to your job and work for free, do you?

There are many other soft business costs he must pass on to the final consumer. For example, he has insurance premiums (Worker's Compensation, Liability, Disability, Health, etc.), permit fees, association dues, assorted taxes to pay, and all of these are invisible to you the paying customer.

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Finally, he has to buy the replacement windows. You may be shocked to discover the actual cost of high-quality aluminum clad wood windows. If you want quality, and it sounds like you are getting it, it comes with a price tag. You can get a feel for the cost as nothing is stopping you from going to the window distributor to get a price as if you are going to buy the windows yourself. Granted, the contractor may get a small professional discount while you pay full retail price, but you will get a good idea of what the windows cost.

My guess is that you want this small contractor to be around in six months if you have a problem. That is a very reasonable expectation. For this to happen his business needs to be profitable. Yes, it is not sinful to make a profit. The marketplace usually culls out contractors who charge excessive profits.

To find out what the average price is for your job, you do indeed need to get quotes from different contractors who are going to install the same exact windows. You must compare apples with apples. The local distributor for this brand of window may have a list of other small contractors who buy and install these same windows on a regular basis. I would ask the distributor for a list of qualified contractors that you can call.

Bids are complicated. To get tight bids that you can really compare, you must have clear directions and a goal so each contractor is bidding on the same thing. To get contractors to show up, offer to pay them $50 or even $100 if they produce a good written estimate. Show them that you value their time!

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Comments:

Derek Cowburn (distinctav.com)
31 Oct 2009, 13:04

Well said Tim! We offer "DIMY kits" (Do It Mostly Yourself) for people willing to save a bit on the labor by doing part of the work themselves.

It's still amazing to see the price expectations of each client. We create VERY detailed proposals and have had people take them to a "friend" and give them the job for $100 less--on a $40,000 scope! Of course--it's never completed apples-to-apples so we are sometimes asked to repair their project.

Guides like yours are excellent and we created an online Build A Budget tool that allows people to get a feel for what it costs to do a job correctly (that will work as expected), even for complex home electronics systems.

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