jmsbrush
Senior Member
- Location
- Central Florida
This is Mike Holts definition as well ,:smile:in his Estimating Book
Defining the terms "Estimate" and "Bid"
- Thread starter Mule
- Start date
- Status
This is Mike Holts definition as well ,:smile:in his Estimating Book
It is my understanding that laws on "estimates" vary from state to state. I remember reading somewhere that the contract coudn't exceed the estimate by more then 10%.
We use the term "quote".
In the written contract form it is "proposal"
On the trucks it says free "estimates".
We use the term "quote".
In the written contract form it is "proposal"
On the trucks it says free "estimates".
In my field, the customer specifications and our offer, if accepted, is what forms the contract. There may be subsequent changes and agreed variations to order.
A typical term you are asked to accept is "Our bid complies in all all respects with all applicable specifications and will be binding on award of contract."
In the time between being invited to tender and deadline for submitting an offer you simply couldn't read all the specifications.
Your competitors are in the same boat.
My usual response is along the lines of "The equipment of our supply complies with standards XYZ which we believe will meet or excede your requirements."
One particular spec sticks in my mind.
Several hundred pages, about three of which actually detailed the equipment required. The rest was about how you should do it. Including a forty page section on how to make packing cases - detail down to what angle to drive in the nails.
A typical term you are asked to accept is "Our bid complies in all all respects with all applicable specifications and will be binding on award of contract."
In the time between being invited to tender and deadline for submitting an offer you simply couldn't read all the specifications.
Your competitors are in the same boat.
My usual response is along the lines of "The equipment of our supply complies with standards XYZ which we believe will meet or excede your requirements."
One particular spec sticks in my mind.
Several hundred pages, about three of which actually detailed the equipment required. The rest was about how you should do it. Including a forty page section on how to make packing cases - detail down to what angle to drive in the nails.
Henry Ford.
electricguy
Senior Member
- Location
- British Columbia Canada
If your referring to all the guys that spend much of there spare time posting on this forum giving us excellent business advice I would just like to say Thank You guys ,if it were not for these other guys i would be still charging T&M at 1980's rates . I'll leave it at that.
growler
Senior Member
- Location
- Atlanta,GA
This is true but you really should take a look at your own web site.
Call or email today!
And ask about our free, No obligation
"not to exceed" estimate price.
Once you throw that "not to exceed" in there is does change things a bit.
If that lady was under the impression that your esimates are not to exceed then the $1600 that you guessed at by pulling it from the rear becomes a not to exceed which you then exceeded.
If you are useing that "not to exceed" on any other paper work, forms or business cards it may get a little difficult for you to charge more than the estimated cost. You may a well just give out quotes. :smile::smile:
1793
Senior Member
- Location
- Louisville, Kentucky
- Occupation
- Inspector
I may be in the minority here but I give "Estimates" for old work, ie...adding a receptacle in a finished wall. This "Estimate" is a "best guess" based on what I know from experience. I may have to charge more for unforeseen complication, obstacles I can't see or know about, and if I catch a break then I may even come in under my "Estimate".
If I'm looking at new work then the "Estimate" is out the window and I give my price to "Do" the job. Here I can see everything and I "know" what it takes and how long I need to complete the job at hand.
If I'm looking at new work then the "Estimate" is out the window and I give my price to "Do" the job. Here I can see everything and I "know" what it takes and how long I need to complete the job at hand.
~Shado~
Senior Member
- Location
- Aurora, Colorado
Here you go Mule...my way
Estimate - 2 meanings
Customer - rough/ballpark figure to accomplish said work - final price given only once job is completed....T&M falls into this area
Company - rough/ballpark figure what said work will cost company
Bid - Locked price given to customer to accomplish said scope of work...change orders are above Bid are extra
Proposal - Written form stating Bid price and scope of work
Quote - Locked price for material given from my supplier for a specified amount of time
Estimate - 2 meanings
Customer - rough/ballpark figure to accomplish said work - final price given only once job is completed....T&M falls into this area
Company - rough/ballpark figure what said work will cost company
Bid - Locked price given to customer to accomplish said scope of work...change orders are above Bid are extra
Proposal - Written form stating Bid price and scope of work
Quote - Locked price for material given from my supplier for a specified amount of time
alfiesauce
Senior Member
the 'not to exceed' bid gives you the flexibility to charge the person less if you actually did it for less though. Thus giving everybody a good deal.
You still need a scope of work laid out that everybody understands so that when it comes time to bill you have the ability to say, yes it cost more because compared to the original scope you added x and y and upgraded w.
What's really odd is when you do give them a 'not to exceed' bid and they get upset with you when the bill comes in because the bill is 'to close to that high number' and they assumed it wouldn't actually cost that much....
Ok, here's a T/M estimate I spoke of the other day. Tell me what's wrong with it, and what's right with it.....
AND lets NOT get hung up and side tracked on my lack of profit in your opinion. Just focus on the verbage for giving a T/M estimate....
-----------------------------------------------------------------------
Hello xxxxx
I have assembled a estimate for your kitchen remodel and service upgrade. This is a
"Time and Materials" estimate known as T and M.
Here's the summary....
Materials.......$2100-2300 (this includes up to a 100 cir/ft for the new 200 amp feeder and a 30-40 circuit breaker panel by Square D)
Labor............$3200-4000 (see details below)
(Rick, labor on the "rough in stage" is a hard one, dealing with a manufactured home there are unknowns. I have increased the price quite a bit to cover for myself so you would not be angry with me for missing the labor units.)
2 men x 2 days = for the "Rough in" stage of the kitchen
2 men x 1 day = for the "Trim out" stage of the kitchen
2 men x 1 day = for the "underground feeder" and "panel change"
2 men x 1 day = for unknown obstacles for any of the above.
TTL 2 x 5 days
We will do your job as efficiently as we know how, without compromising quality or code compliance. We pride ourselves on quality, and your satisfaction is of most concern.
Rick if everything goes really slick, we could have your job done in 4 days instead of 5.
Material estimates......You will only be charged actual materials plus 25% over wholesale prices, we will disclose all parts tickets to you.
Labor estimates.....You will only be charged actual labor rates at Journeyman $65 and Apprentice is $35
References...If you need references, we can provide them for you. Here are a few....
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
We will invoice you twice, first when we are complete on the rough in stage, and the second when the trim out stage is completed. Payment is expected within 30 days of invoice(s) so we can pay our suppliers and labor.
Customer is responsible for underground locating, and repairs from the excavation process are subject to additional charges. We are fully licensed, bonded and insured..OKLIC#xxxx
If you have any questions, just give us a call, or email...............
AND lets NOT get hung up and side tracked on my lack of profit in your opinion. Just focus on the verbage for giving a T/M estimate....
-----------------------------------------------------------------------
Hello xxxxx
I have assembled a estimate for your kitchen remodel and service upgrade. This is a
"Time and Materials" estimate known as T and M.
Here's the summary....
Materials.......$2100-2300 (this includes up to a 100 cir/ft for the new 200 amp feeder and a 30-40 circuit breaker panel by Square D)
Labor............$3200-4000 (see details below)
(Rick, labor on the "rough in stage" is a hard one, dealing with a manufactured home there are unknowns. I have increased the price quite a bit to cover for myself so you would not be angry with me for missing the labor units.)
2 men x 2 days = for the "Rough in" stage of the kitchen
2 men x 1 day = for the "Trim out" stage of the kitchen
2 men x 1 day = for the "underground feeder" and "panel change"
2 men x 1 day = for unknown obstacles for any of the above.
TTL 2 x 5 days
We will do your job as efficiently as we know how, without compromising quality or code compliance. We pride ourselves on quality, and your satisfaction is of most concern.
Rick if everything goes really slick, we could have your job done in 4 days instead of 5.
Material estimates......You will only be charged actual materials plus 25% over wholesale prices, we will disclose all parts tickets to you.
Labor estimates.....You will only be charged actual labor rates at Journeyman $65 and Apprentice is $35
References...If you need references, we can provide them for you. Here are a few....
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
We will invoice you twice, first when we are complete on the rough in stage, and the second when the trim out stage is completed. Payment is expected within 30 days of invoice(s) so we can pay our suppliers and labor.
Customer is responsible for underground locating, and repairs from the excavation process are subject to additional charges. We are fully licensed, bonded and insured..OKLIC#xxxx
If you have any questions, just give us a call, or email...............
~Shado~
Senior Member
- Location
- Aurora, Colorado
I made changes in color as I would see it.
1793
Senior Member
- Location
- Louisville, Kentucky
- Occupation
- Inspector
I have tried to give breakdowns between material and labor and I have found it is best to not let my material cost and mark-up be known. Just my thoughts.
Rewire
Senior Member
- Location
- Lake of the Ozarks
A side note, I noticed you say customer is responsible for underground locate, in our state the person doing the excavating is responsible as liability is not transferable is it different in your area?
It may also, be he does not have coverage for doing undergound work, the coverages for underground and high voltage are more expensive then a simple wiring within buildings policy, something he may want to check, but yes in most states the contractor is responsible for calling the locate service, and his name goes on the locate ticket as the responsible party.
growler
Senior Member
- Location
- Atlanta,GA
Looking at the estimate I can see it going to cost between $5300 and $6300 and take between 4 and 5 days to run new feeder cable, panel and kitchen remodel.
Ok, so what's covered by the estimate? If there is a set of plans then you can reference the scope of work to drawings provided but with no plans a detailed scope of work should be included.
Scope of work: How many new 20 Amp. circuits are they getting?
How many range circuits?
How many appliances?
How many light fixtures and type and who pays for them?
How many receptacles and switches?
Who is to disconnect circuits for demo work? What's included in the $2100-2300 materials? Any ceiling fans or chandeliers? Any range hoods or kitchen ventilations fans? Who is responsible for hauling way the trash and debris? Does the price cover permit fees and what type of warranty is the customer getting?
Even with T&M you need to set some sort of parameters for the work?
Rewire
Senior Member
- Location
- Lake of the Ozarks
Mr XXXX
I have reviewed the scope of your project and your investment will not exceed $6500.00
Our billing will be based on a crew charge of $109.00/hr and cost of only material installed.
We anticipate this project will break down as follows
Ruff in kitchen 2.5 days
service 1.5 days
finish /cleanup 1.5 days
A deposit of $1500.00 dollars will be required prior to start of project
billing and payment will be at ruff in completion, again at service completion with final bill due at passing of occupancy inspection
certificate of insurance is available upon request
A signed lien waiver will be provided upon full payment at end of project
All work above and beyond the original scope will be billed at same rate
I have reviewed the scope of your project and your investment will not exceed $6500.00
Our billing will be based on a crew charge of $109.00/hr and cost of only material installed.
We anticipate this project will break down as follows
Ruff in kitchen 2.5 days
service 1.5 days
finish /cleanup 1.5 days
A deposit of $1500.00 dollars will be required prior to start of project
billing and payment will be at ruff in completion, again at service completion with final bill due at passing of occupancy inspection
certificate of insurance is available upon request
A signed lien waiver will be provided upon full payment at end of project
All work above and beyond the original scope will be billed at same rate
Last edited:
Exactly.
Your estimate is has entirely too much irrelevant information and lacks important details.
Cut out the blah blah blah and get to the details.
Do you get paid for the hour it will take to figure out your bill? Do you round up or down for time on the job? Any travel time? Any time to putchase the materials? Any time to put the recessed can hangers and lampholders back in place after they fell out during shipping? Every minute is a dollar.
The problem with this kind of T&M is that you get penalized for being experienced, owning proper tools,working smart and being efficient.
It's time to start having some confidence in your abilities and give a straight up quote for simple jobs like this. You are wasting time and that's not something old guys can afford to do.
Keep it simple.
Service change = $XXXX.00
New circuits to kitchen = $XXX.00
X lights, X switches and X dimmers = $XXX.00
Disclaimers: Light fixtures, ceiling/exhaust fans FBO, unmarked underground utilities, 50% deposit, etc.
You are now a contractor. Your job description has changed from simply getting the job done. You now have to get the job done, guarantee the work AND guarantee an overall profit.
Don't forget about te $350 debit from the old lady. That's got to come from somewhere so don't feel guilty if you make $350 more than expected one day. It's financial Karma.
Even this isn't specific enough.
How big is a crew? How many hours in a day?
When you show up at 10 AM after spending a a few hours nmaking a list and rounding up materials, Does the HO know he was payiing you since 7?
Too much room for misunderstandings.
Rewire
Senior Member
- Location
- Lake of the Ozarks
2 man crew should would be more specific and Off site time to be billed at them same rate this time will include but not limited to travel to and from site ,material handling and logistics.
permits to be billed at cost
At this amount and with the scope of work i would not do it T&M but would have just bid it.
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