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Bid price breakdown

wooddaddy's picture

Hi all,


I've been lurking here for quite some time and this is my first post.  I just "went out on my own" after spending the last 12 years as a high school woodshop teacher.  But, I've been working as a carp for the last 18 years(outta high school, during college, side work while teaching....you get the picture).  Recently I have had two separate occasions where people are asking for a specific price breakdown on bids that I have given them.  Traditionally, I have given bids, for both large and small jobs, outlining the work to be completed and a bottom line price that includes labor and materials.  I have rarely been asked to break them down.  Job at hand involves lengthly meeting at proposed customers house to discuss three custom, built-in shelving units, a custom, built-in T.V. cabinet and oak trim in two rooms(two-piece crown, chair, casing w/plinth blocks & rosettes, base and shoe) replacement of wrought iron handrail w/oak handrail, ballusters, volute....  casing a plaster arch....


Customer is a referral, very particular about work to be performed etc., while also being kind of vague.  I ask what kind of trim---she says "whatever you think, you pick it out"!  So I do.  I go through the fun of preparing the bid and give her a price for the custom built-ins and trim.


I get an email stating that I was "much higher" than other bids and that she would like a price breakdown of each individual component of the bid so that she could see where the additional cost is.  


My question is this, am I unreasonable in not wanting to deal with this.  I kinda feel like I put my time into preparing this picky, vague estimate.  Would it be unprofessional to respond that "that is my price for everything-labor and materials"


Paul

(post #118822, reply #1 of 36)

I never give a detailed breakdown of my bids - just overall cost, schedule, deposit, and progress payments if applicable.


When customers tell me to "pick whatever I think would look good", I make sure they understand that changes will add to the final price - lol.

Bidding on Cabinets (post #118822, reply #36 of 36)

Hi Dave,

I'm new on the forum and I need some advice in getting some work-flow. I'm an experience cabinet maker( residential/comercial for more than 15 years)  but I worked only for a company; ocasionally side jobs to.This year I've got my Contractor License and I want to go on my own. I don't know where I can go to bid on jobs or how to get them - never don it. Any advice or tips will be greatly apreciated.

Chris

(post #118822, reply #2 of 36)

Hi Wooddaddy.


I'm a framer, but I think I can commisserate and understand the situation.


I usually ask at the first meeting, before I prepare the bid, if they'd like some items broken out seperately.  I initiate it and then I get to decide to what extent I'll break things down.


I won't seperate labor from materials though.  That's more information than anyone needs IMO.  They are buying a product, not individual compents and labot.


In your situation I would be willing to seperate the individual tasks into lump sum prices.  That shouldn't be too hard for you to do, as I would hope that how you came up with your quote anyway.


Item 1:  3 Custom shelving units, fabricated and installed: $xxxx.xx


Item 2: TV Cabinet, fabricated and installed:  $xxxx.xx


Item 3: Oak trim in room A.  Supplied, installed, and finished: $xxxx.xx


Item 4: Oak trim in room B.  Supplied, installed, and finished:  $xxxx.xx


Item 5.  Removal of existing handrail and replaced with oak:  $xxx.xx (includes materials)


Item 6.  Case a plaster arch..... you get the picture.


It's my opinion that you will at least have to meet them halfway in their request if you want the job.  If you simply flat-out refuse to do any cost break-down they will become suspicious of you and your chances of landing the job will be slim.


The fact that you are higher than everyone else, yet they haven't dropped you yet tells me that the door isn't closed yet.  It tells me that they really have a good feeling about you, but want a little reassurance of where that extra money will be going.  In a word.... they want to use you.... but need a little stroking.


Another word of caution about their "vague" requests.  It's ok if they're vague at the bidding stage.  But they should be hammered out in detail at contract signing.  Get them a Brosco book or similar and have them choose their moldings.  Don't leave the door open for them to walk into a room of oak that you've just finished and tell you that they expected Stafford and not Colonial.


(post #118822, reply #3 of 36)

I only give a price breakdown when the job is cost plus. If I give a bid at most I might separate for the client like groups of tasks i.e. plumbing, trim or paint cost.


I had a client go to the trouble to give me a written list of all the things they wanted,  asking for each item to be priced out, I did but added an additional markup for each item in case I was asked only to do that item. Then I gave my full unseparated bid price as well saying if I do all this then here is my complete turnkey price.


If my price is to high for a client then I point out that to lower the price they'll have to adjust their choices, maybe a cheaper carpet, paint instead of stain trim or doing some of the labor themselves.


You will get picked to death if you let a client start jerking you around by shopping your bid back and forth with another contractor.


 

 

 

(post #118822, reply #4 of 36)

One more note:


If this shoe fits into your bidding considerations then it may be applicable:


I would explain to them that if their intention of cost breakdown is to cherry-pick your quote and only have you do certain tasks, then it will directly effect pricing.   Explain that the 'total package' prices assumes certain things such as being able to complete ALL of the carpentry in one phase.  And all of the material purchases in trip.  And all of the finishing in one stage.  Multiple set-up and breakdown and trips to supply houses will increase the total cost of the package.  Itemize the tasks, a la carte, with the total being higher than the lump sum.


(post #118822, reply #5 of 36)

Not to hi-jack the thread, but did you happen to get the email I sent to you Brian?

Justin Fink - FHB Editorial


Your Friendly Neighborhood Moderator

Justin Fink - FHB Editorial

(post #118822, reply #7 of 36)

I did.  Mulling it over.  I promise to get back to you by day's end. 

(post #118822, reply #6 of 36)

If I run into a situation where I'm being shopped against someone else I ask to see the other quote so that I can help the customer be sure we're pricing apples to apples. Is the scope of work the same, is the other guy licensed & insured, does he schlep all materials for the job and then schlep out the debris (debris removal, recycling what I can and environmentally safe disposal of everything else is a nice little line item for me - customers may not go that far themselves but they seem willing to write a bigger check to have it done for them!). Some customers will share the other quote, some won't. The ones that won't I usually end up walking away from.


On the few occasions, early on in my own biz, when I broke down pricing it became a game for the customer to try and back into my hourly rate. A big mess o' headaches, don't do it.


-Norm


 

(post #118822, reply #8 of 36)

Thanks for the input all.  I guess that I should have mentioned that the customer is a "regional manager for installation" at one of the big box stores.  I do not work for them/her.  I know her and her hubby  from church.  Her job is to dictate the price paid to a contractor for for installation of trim/kitchens/baths, so on......... So I am assuming that she is interested in how much money I will be making personally.  However, custom built-ins are not out of the box kitchen cabs, but I don't want to burn any bridges nonetheless. 

(post #118822, reply #9 of 36)

That last tidbit kinda changes the big picture a bit.  I'd meet 'em halfway.  I'd break some of the tasks down.  But not even close to the point where labor and materials could be seperated.  Or cut and run.

(post #118822, reply #10 of 36)

I would not break out the bid! All their trying to do is cut your labor price. They want your work they just want it cheaper. I would call them up and explain why they should use you. But I would not cut my price more than 3 or 4 %. Some people need to feel like they got a deal, but others can be a real pain. Good luck.

(post #118822, reply #12 of 36)

 So I am assuming that she is interested in how much money I will be making personally


This relates back to another Posting about having to nice a truck or looking to expensive to get the job.


How much money you make is your business! Don't get trapped into making only what someone else thinks you should.


What you pay yourself personally and what your company charges a client are far from the same thing especially if your ever to improve your living and your craft.


 

 

 

(post #118822, reply #13 of 36)

A. Don't assume. If you want to know and understand "why" ask, or ask the right questions.

B. The guys installing out of the (big) box cabinets have a different skill sets and tools than those fabricating and installing custom cabinetry. If she wanted them she wouldn't be talking to you.

C. Why would she waste time and thought on your price if she was only going to use an installer from her corral? Getting your price to just compare what a great deal her Big Box customers wre getting doesn't make sense.

F


Experiment with the placing of the ingredients on the plate. Try the mozzarella on the left, the tomato in the middle, the avocado on the right. Have fun. Then decide it goes tomato, mozzarella, avocado. Anything else looks stupid.

Richard E. Grant as Simon Marchmont - Posh Nosh


Flay your Suffolk bought-this-morning sole with organic hand-cracked pepper and blasted salt. Thrill each side for four minutes at torchmark haut. Interrogate a lemon. Embarrass any tough roots from the samphire. Then bamboozle till it's al dente with that certain je ne sais quoi.

Arabella Weir as Minty Marchmont - Posh Nosh


(post #118822, reply #28 of 36)

"C. Why would she waste time and thought on your price if she was only going to use an installer from her corral? Getting your price to just compare what a great deal her Big Box customers were getting doesn't make sense."

I can easily beat those big box stores with far superior quality if one takes a look at their installation price added on. Their installation prices are outrageous. I cannot beat them on the price of a cabinet but I do on the installation of my cabinets. Ever try to install their cabinets? They take about 3 times as long because they come in small units and you have to string them together. When I make mine they are one unit. So mine install much quicker. I got to the point where I wil never install HD or Lowe's cabinets ever again. A friend of mine and I were building a large home and the homeowner wanted to ave a few bucks so he went and bought some HD cabinets. It took us three weeks to install the cabinets in that home when it should have taken us one week or less. The cabinets were glued together with a glue like thick rubber cement.

(post #118822, reply #29 of 36)

79305.9 in reply to 79305.1 

Thanks for the input all.  I guess that I should have mentioned that the customer is a "regional manager for installation" at one of the big box stores


You're serious, right?  And they told you to use whatever trim and materials you decided?  And now they're questioning your price?  The correct response then is to tell them to provide you with a list of trim etc that they want to use, and you'll reprice the job. 


Try this:  call up a car dealership, and ask the price of a car.  "what car?"  "oh, you decide, just give me a price".  Right.  Customer credibility approaching zero, captain.

 

(post #118822, reply #11 of 36)

MY take is not that they want a "Price Breakdown" (I know that's what they asked for), rather they want an explaination of what you are giving them to compare to what others are offerring.

It goes like this. They have no idea what they are getting themselves into or the cast of characters. So, instinctively they are asking for something they know, understand and can interpret. This happens to be price.

You can reply to their request in prose form rather than in $/ line item.

Explain that a) you helped better define the design, b) you selected mouldings etc that you thought they would appreciate/ like rather than some less expensive styles which they would be unhappy with or would ask for an alternate later on. In essence, you and the others were not bidding on the same project, but instead an interpretation of the same project. By doing both a & b, you actually saved them $, but more important - you saved them time and frustration down the line.

You were referred to them. You have a track record and a stlye, proceedure for doing things. DO NOT waiver from this - especially in the beginning. You are setting a precident with everything you do. Be consistant and true to yourself first. Everything will fall into place after that. Make the comparision be bewteen what you - at the referal job - and you - at this job. That's where their confidence rests.

Hope this makes sense and helps,

Frankie


Experiment with the placing of the ingredients on the plate. Try the mozzarella on the left, the tomato in the middle, the avocado on the right. Have fun. Then decide it goes tomato, mozzarella, avocado. Anything else looks stupid.

Richard E. Grant as Simon Marchmont - Posh Nosh


Flay your Suffolk bought-this-morning sole with organic hand-cracked pepper and blasted salt. Thrill each side for four minutes at torchmark haut. Interrogate a lemon. Embarrass any tough roots from the samphire. Then bamboozle till it's al dente with that certain je ne sais quoi.

Arabella Weir as Minty Marchmont - Posh Nosh


(post #118822, reply #14 of 36)

Welcome to the world of "bidding". You have the luxury of being the only professional who gets asked things like "what is your profit and overhead on this job", or hearing things like "I would have never hired you if I knew you drove such a new truck" (see related thread).


Here's my answer to your specific question: only provide the breakdown if it gives someone information that helps them tailor the project to their budget. Example: I am pricing a new house for you, and come to the meeting saying "$400,000." With a large and complex project like a house, you may want to know that your very expensive choice of windows, flooring, and radiant heat are contributing significantly to the cost. You copuld adjust your choices of things to fit your budget. So, I give you a breakdown that shows the windows cost X, the flooring costs Y, and the radiant costs Z.


With your project, is there info you can give the client that will help them to understand how to change the specs to influence the price? Maybe. However, it is not worth preparing a detailed breakdown that says "a piece of Oak cove molding is X, a Blum hinge is Y, and a can of varnish is Z."


You have been told you are the high bidder. Welcome again! I may not always be the high bidder, but I am never the low bidder. I am going to guess the the potential customer is interested in your level of work and in dealing with you and wants to find some way to lower the price. The average consumer is trained to "get 3 bids" (even though they have no idea how to solicit apples-to-apples responses) and then some think that asking for a breakdown will cause you to drop the price.


I never, ever drop the price of my work. I do my homework, prepare a proposal, and it's take it or leave it. Suggest you do the same...

(post #118822, reply #15 of 36)

I just saw the part about how the potential client is the installation manager for a box store. Oh boy, what a can of worms that it. I would not give any breakout info to a client like that. Tell her that the work you do, and the work she contracts for, are not even part of the same world. She wants to jack you the way she jacks every other contractor at work. I would stick to what you have given her already, no further breakdown. I doubt there are even any other bids at this point, it's just her standard negotiating tactic to crack you.

(post #118822, reply #16 of 36)

Okay, I'm a home owner so I'll give you a little different perspective.  Your bid has some level of trim work that is most likely different from your competition.  You really should show them the trim you picked and perhaps some other less costly options.  Clearly a 7 piece built up trim is going to be more than just a one piece trim.  Stain grade verses paint grade should be offered as well.  This would give them some idea of questions they need answered from the others while giving them a better feel of your work and design choices.  Personally, I don't really care what you get paid, but I do want to know what I'll get for my money.  Right now it doesn't sound like they really have a clue really what they are getting or even really what they want. 


 


Good luck,


Bruce

(post #118822, reply #17 of 36)

>>Your bid has some level of trim work that is most likely different from your competition.  You really should show them the trim you picked


You need to know what kind of trim you want. If you don't, I can't price it out, and if you have different contractors giving you prices on the "same" job with different specs you're just confusing yourself.


Trust me, homeowners are generally not good at soliciting prices for work. They get proposals back that vary wildly because they haven't done their homework and defined the job.


If you need someone to help design and specify, then you hire them for that purpose.

(post #118822, reply #32 of 36)

 if you have different contractors giving you prices on the "same" job with different specs you're just confusing yourself.


      David,  Hope you don't mind if I steal this quote, I think Its appropriate for just about every job I bid.

(post #118822, reply #18 of 36)

Maybe, since she works for a "lumber yard" she is wanting you to break out your material cost, so that if she could buy it and get an employee discount, she could see what your cost would be in labor so she would know what it will cost her in the end.  She should have told you that if this is the case, but just another perspective so you don't burn any bridges...

(post #118822, reply #19 of 36)

to add to this constellation of great feedback some of your dialogue with her in the near future has to concern the fact you have probably invested anywhere from 6 - 16 hrs and too much self reflection over evil money - and have not received one iota of green for your efforts

NOW is when you step in and suggest / command design / refinement fees which tend to be higher than those hourly rates you charge when all conditions are known and you're churning out what you feel you where put on this planet to do

stand tall & stick to what makes your blood flow
making some planters in your backyard and donating them to some candystripers will make you richer than consuming yourself with always pleasing these callers

wish I had this breaktime crew to toss things around with many moons ago
all the best John

(post #118822, reply #20 of 36)

My suggestion is to give her a price when you know exactly what she wants.

Often what I have done in similar cases is to spec the job and give a price. I give no quantities except what the plans call for.

For example I may specify the brand and of hinges on a set of cabinets. When I give a bid I write in the bid that the price is only good for 30 days. In other words they have 30 days to sign the contract.

With enough questions you can tell if they like your work or if they are price shopping. My quality is not a negotiable and neither is my price. I give people a reasonable price for the quality I deliver and I won't negotiate on that. If price is a factor then I may make changes in other areas such as the amount of hardware. There are often ways to reduce the price but not the quality.

(post #118822, reply #21 of 36)

<<When I give a bid I write in the bid that the price is only good for 30 days.>>


Interesting. What do you do if they come back to you later than 30 days? Would this mean you would no longer consider the job? would it be an upcharge? A re-estimate?


I'm just curious why the 30 day idea? Perhaps only to motivate them? ie: Is it a bluff?


Justin Fink - FHB Editorial


Your Friendly Neighborhood Moderator

Justin Fink - FHB Editorial

(post #118822, reply #22 of 36)

I do the same..... 30 days to accept or bid is expired.  I can't speak for the other guys but I do it for a couple reasons.


1.  I price framing differently in the summer than in the winter.  Days are shorter.  Work moves slower.  And snow costs money.


2. While I rarely supply many materials, the prices can change dramatically in 30 or 60 days and directly effect the bottom line. 


3.  Another is scheduling.  When I'm flush with work for a few months out, I tend to start bidding higher.  The busier I am, the more expensive I am.   Emergencies, lack of planning on "your" part, or the inability to commit and/or make a decision can get expensive.


4.  And to some extent, it does encourage people to "sh1t, or get off the pot".  :)




Edited 9/28/2006 2:01 pm ET by dieselpig

(post #118822, reply #23 of 36)

Wow, all 4 of those are really excellent reasons. Thanks for the clarification Brian.

Justin Fink - FHB Editorial


Your Friendly Neighborhood Moderator

Justin Fink - FHB Editorial

(post #118822, reply #24 of 36)

It is not a bluff. I do not want people to come back to me a year later and try to get the same price from me especially if costs have gone up. It also forces people to make a decision. Usually the response I get is direct communication. If they ask me why, I tell them because my costs are going up all the time.

So often people do not really know what something will cost so thjey may get sticker shock and have to wait awhile. There have been times when the person has told me they want me to do the work but they will have to wait a few months until they get more money. Usually I do not change the price then. Honesty plays a big part in my mind.

I do not set a time until we discuss everything and the contract is signed. Thqat is when I schedule their work. If in the meantime I have some other jobs going on or have added a job then they will have to wait until I can do their job. I have had people wait over a year. I do jobs in the order they come most of the time. There are people who tell me they want me to do their work but it is no hurry and just to tell them when I can get to it. I try to treat the customer the same way I would want to be treated. Most of the time people are willing to wait and work with me when I am honest and direct with them. Some have told me that when I have time to come and do the work. Some have had work for me that has gone on over a period of several years. When I have some time I give them a call.

Edited 9/28/2006 3:33 pm by gb93433


Edited 9/28/2006 3:33 pm by gb93433

(post #118822, reply #25 of 36)

Sounds like a solid job-scheduling plan, there are definitly lessons to be gleened from the way you run things. Thanks!

Justin Fink - FHB Editorial


Your Friendly Neighborhood Moderator

Justin Fink - FHB Editorial

(post #118822, reply #26 of 36)

Wooddaddy, I'll throw in my two cents from the point of view of someone who is a customer of pros like you. If she said your price was much higher but she asked for more detail, she's interested! If I get bids on work for my house, I don't take the lowest automatically, but I sure shy away from the "much higher" one most every time. My first reaction to your question is, if I was the customer, the reason I would ask for more detail from the highest bidder would be because I really want to go with that bidder, I'm a little thrown by the discrepancy, and I'd like to figure out why the guy I thought in advance I'd prefer is coming in so out of line with others. If I like the reason, I'll still go with him, or maybe realize the price difference is the result of you selecting higher cost materials I don't actually want, or maybe you have higher cost materials I DO want, and that extra explanation could put you over the top despite the cost.

Your colleagues have advice well worth listening to on how to keep your cards close to your chest in terms of how you run your business, and I don't know anything about that. But in terms of getting this job, I'd say take a look at their suggestions of what kind of additional information you can communicate to explain your price. Maybe she didn't phrase her question really artfully, but I wouldn't assume she has ulterior motives.