Strictly Labor (Part II)

[solaeros]

the other day I asked for input about bidding a labor only deal for a subdivision. The overwhelming response I received went something like "Run Forest Run", "Don't do it!!", "You'll lose your @$#%!", etc. etc. So naturally, I went ahead and bid it. Allright, Allright, I know you all think I'm an Idiot but as a Full time Dad with a full time E/I position at a local plant, plus this contracting thing I'm getting pretty worn out, not to mention the fact that my wife is currently going through treatment for breast cancer which takes up every other possible free moment, dollar, and ounce of sanity we have. (Not looking for pity just trying to lead ya into where I'm at with my decisions. I would really like to contract only and quit my other job) any way, the houses range from about 2400-3000 sq.ft. I made an addendum sheet stating my estimate would include meter and panel installation, rough in, and trim out wiring and that's it. No permits, no material runs, no material warranties, and all proper materials in sufficient quantities must be present on job site before work commences.
As I said before i don't have a lot of resi. experience so I'd like feedback on the quotes I gave which range from $4950.00 to $6200.00 relative to the home size.
Gracias

[active1]

I don't know if this is you but a number of electricians start their own gig more as a job for themselves then to create a solid business.

While the job might give them more flexibility with scheduling at first it can also cause them to work more hours and have less weekends and vacations.

The money might seem better starting out until they realize the non productive work involved, no overtime pay, added taxes, and hidden costs of doing business.

They may not figure in giving up rights such as workers comp, unemployment, getting paid for your labor, etc. While taking on financial risk and liability.

We don't do home here in NM cable so I could not guess how long it would take. I am wondering how long you figure to do each house. How did you get the $5,000-6,200 amounts? Will that pay you better than a JW after overhead? Did you figure any overhead or are you one of those "I don' have any overhead".

I don't figure by the square foot but some times I will size up my or other numbers that way. I never herd of doing electric work for $2/foot.

[LarryFine]

As one of the few (or maybe the only one) who has and would take a labor-only contract, just one thing: . . . all proper materials in sufficient quantities must be present on job site before work commences.
What about an "and if not . . . " clause. How are you compensated for lost time if the materials are not present and proper? There should be more than just "Call me when they get here."

[LarryFine]

I never herd of doing electric work for $2/foot.
Remember, that excludes materials.

[macmikeman]

If you win the bid, contact me via pm right away. I have done tracks before and have some good ways to squeeze the most out of them. I think I can be of help to you and I will share what I did with you to make money at it.

[solaeros]

I have taken the few residential jobs I have done in the past, looked at the hours it took to wire these; averaged them, and converted it into a square footage cost. I'm sure this method is full of holes but it's all I could come up with. As for the contingency that may arise if the materials (or any other addendum I put in) aren't on site as needed. I had planned on putting in an hourly pay clause, If I'm set back three hours for materials then its $35 per hour plus travel. I figured I would wait to see if I might get the job before I settled all of the details of the contract. And as for figuring in my overhead that's part of why I'm still working another full time job. I won't lie that I'm still figuring that out little by little with each job I do

[solaeros]

I will definitely contact you if I land the job Macmike. So does anyone have any comments about the qoutes I gave? I understand it's probably hard without seeing plans but I'd take whatever input I could

[wireman71]

Sounds good to me. Where can I get into this deal. No materials. I bet one guy could do a 2400 in a week or maybe two max(i'm not a resi guy per say) If I could make 10K in a mos I'd jump all over that in a heart beat.

[macmikeman]

Sounds good to me. Where can I get into this deal. If I could make 10K in a mos I'd jump all over that in a heart beat.

If you want to make 10k a month, you had better be pulling in about 20-25k , even though materials are supplied in this case, there is still a WHOLE lot more to it than paying for materials.

[haskindm]

I suspect that you will win this bid because they probably will not find anyone else willing to bid labor only. You will find that they will provide you with the cheapest junk parts that they can find which will also be the hardest to install and most likely to fail. Every failure will be blamed on installation rather than defective materials and you will be expected to eat it. Materials will not be present when you need them and you will be blamed because they "didn't know you would need that today". Can't you work around it? Will you need to hire additional help to complete this work? Did you figure enough to pay their salary, unemployment insurance, and Social Security? Are you going to try to provide medical insurance for your workers? You will end up eating almost all warranty repairs and you will not be paid for lost time due to lack of materials. They will probably also want you to pick up the material either from their shop or at the supply house. If there was ever a recipe for disaster, this is it. I wish you well, and hope that you are dealing with an honorable builder, but I have my doubts. Most honorable builders would not ask that you bid labor only. You state that you have a full-time job; how are you going to keep up with this project when it really gets rolling? The builder will not care that you have other obligations, he just wants his work done yesterday so he can get his draw. Also remember that almost 50 cents of every dollar that you make will belong to Uncle Sam since you are self-employed.

[480sparky]

If nothing else, let us know how you came out with this. That way, at least half of us could crow, "See? I told you so!"

[satcom]

If nothing else, let us know how you came out with this. That way, at least half of us could crow, "See? I told you so!"

He may be too busy, trying to put his life back together, after this job. I hope I am wrong, but over the years I notice, most of these sceams end up in a mess, I wonder how he is going to supervise a job like that, while he is commited to a full time job.

[active1]

Do you know the time schedule comitment? How quickly is the GC planning on putting up houses? Will one electrician be able to keep up with the labor and paperwork? Is there a penalty if you get behind?

Additional labor added could throw things off. Like if you had 2 guys waiting for material $35/hr is a loss. At that point it could be cheaper for you to provide and your own wire nuts and alike.


Not long ago I talked to another EC that I bid against the year before.
The GC told him he was the highest which was a lie. Then talked the other EC into a much lower amount if he would provide materials. The GC got the EC scrap material such as used pipe, wire, etc. cut out from demo work to put in a new house. Of coarse their was a lot needed missing. The EC was told to purchase what was missing AT the exact cost. In the end of the job their was a big dispute about what was missing, purchases of material not approved by the GC, etc. The EC said he was never paid for some of the material he purchased, had a hard time getting paid, and the project was run poorly which cost him more time.

The GC providing the material costs the EC more time and makes them less money.

[emahler]

why is it that our trade, which I personally think takes the most brains to master, full of people who seem to lack the basic of sales, people, etc skills?

Most resi GC's are nothing more than framers who dress nice, yet we let them tell us what we should and shouldn't do.

They merely can talk the talk....then they convince us to pay them to walk the walk...

I don't get it..

[jaylectricity]

why is it that our trade, which I personally think takes the most brains to master, full of people who seem to lack the basic of sales, people, etc skills?

Most resi GC's are nothing more than framers who dress nice, yet we let them tell us what we should and shouldn't do.

They merely can talk the talk....then they convince us to pay them to walk the walk...

I don't get it..

Because electricians are more likely to be of the "nerdy, math skills" type. :smile:

[celtic]

Because electricians are more likely to be of the "nerdy, math skills" type. :smile:

You don't wanna mess with a man in a kilt...
http://www.utilikilts.com/images/products/kilts/workmans_lg.jpg

..even IF he has a pocket protector :grin:

[emahler]

Because electricians are more likely to be of the "nerdy, math skills" type. :smile:

then you would think that we would at least know how to calculate a profit...

[celtic]

then you would think that we would at least know how to calculate a profit...

Some still subscribe to the to:
If I work 40hrs/wk for $20 rather than the 20hrs/wk for $40 logic.

They don't have the time to actually figure it out...sad.

[solaeros]

If I get this job I'll let you guys know how things proceed. Most of your points, I believe are valid and Don't go unheard. When it comes down to it the gc is in the same position as the ec for this project. the whole subdivision is under the oversight of a development company from california. The reason they won't allow the contractor to provide materials (aside from the fact that their getting vollume discounts) is because THEY offer the warranty for the homes not the GC or EC. So they want stringent control over what's being used in the home; the prospective home owner has three finish options for each of the six floor plans offered and they are not alowed to deviate from this because of the warranty provided.

[macmikeman]

Be wary. Developers can be very good and upfront, and then there are those who plan to attend the festivities only until the 80 percent mark on the development, and then dissapear into thin air leaving you holding the bag.

[abrownpe]

It seems from my view point that GC's tend to hold the money till you can't take it anymore (ie get out of the business). If you're not protected by mechanic's lien laws (and even if you are), if you don't own the material you've installed it's tough to get your money.

I've seen GC's roll over EC's because they save a bunch of money by not paying. One small contractor told me he had to get a job, because local GC's had $100,000 his money

[wireman71]

I think mikeman is trying to say get paid ASAP for each house.

[satcom]

I think mikeman is trying to say get paid ASAP for each house.

Let's hope he has a written contract, with payment terms, and exclusions for this work.

[macmikeman]

What I was describing was how some development company's change name and address like we change our socks and underwear. There are many really good and reliable developers out there nowadays, and maybe this problem has gone away over the years due to bonding, but I still remember the dissapearing act of years gone by. Small developers would get a medium size project going, complete and sell enough units to reach the proffit goal they had in mind, and then go quietly file bankruptcy leaving all the tail end sub contractors (and homebuyers) in the lurch. Within a year the same players would be at it again in the next county with a new company. When I did townhouse projects and track houses, I made sure each house or unit was paid separate, payment in full before 30 days from completion of each unit, or work stopped dead until the money flowed again.

[growler]

When it comes down to it the gc is in the same position as the ec for this project. the whole subdivision is under the oversight of a development company from california.

Have you even checked out this development company? Do you know how long they have been in business? Do you know of other suddivisions that they have completed? Do you know who's neck you may have to wring to get your money? Know who you are dealing with and you are twice as likey to get paid.

when you play poker you should never think about the money because it interferes with your game. When you contract you should only think about the money because that is the game.:grin:

[satcom]

What I was describing was how some development company's change name and address like we change our socks and underwear. There are many really good and reliable developers out there nowadays, and maybe this problem has gone away over the years due to bonding, but I still remember the dissapearing act of years gone by. Small developers would get a medium size project going, complete and sell enough units to reach the proffit goal they had in mind, and then go quietly file bankruptcy leaving all the tail end sub contractors (and homebuyers) in the lurch. Within a year the same players would be at it again in the next county with a new company. When I did townhouse projects and track houses, I made sure each house or unit was paid separate, payment in full before 30 days from completion of each unit, or work stopped dead until the money flowed again.

What! check the builders credit, and past preformance, who does that, just dive in the water is fine --- http://www.iht.com/articles/2007/04/15/bloomberg/bxhome.php

In my area alone, Kara Homes, a New Jersey builder, left all the subs unpaid, many of them now in deep debt themself, with no chance of recovering.

[emahler]

including one EC, who doesn't work on high margins, who according to court papers is holding the note on over $500,000..... that's a lot of money...