Estimate T&M

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1793

1793

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Louisville, Kentucky
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Inspector
I have a job staring me in the face and the HO wants an "Idea" of the cost involved.

How do most of you estimate a job that is clearly one to be priced as T&M?

Thanks in advance.
 
You don't. If the owner needs an estimate, give him one that is high enough to cover all eventualities. If he is willing to do the job T&M, that means that he is willing to share the risk that you may run into something unexpected that will cause the cost of the job to go up. If you give him an "idea" of the cost of the job, you will be expected to honor that "idea" as a maximum quote. Everything will be OK if the T&M comes in at less than the quote, but heaven help you if it goes over. Either give an estimate or do the job T&M, don't try to do both, it won't work.
 
haskindm said:
You don't. If the owner needs an estimate, give him one that is high enough to cover all eventualities. If he is willing to do the job T&M, that means that he is willing to share the risk that you may run into something unexpected that will cause the cost of the job to go up. If you give him an "idea" of the cost of the job, you will be expected to honor that "idea" as a maximum quote. Everything will be OK if the T&M comes in at less than the quote, but heaven help you if it goes over. Either give an estimate or do the job T&M, don't try to do both, it won't work.
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It is amazing how often I've given an ESTIMATE and folks think it is a QUOTE.

I agree that T&M cannot be "estimated". I mean, thats why we call it T&M.
 
haskindm said:
You don't. If the owner needs an estimate, give him one that is high enough to cover all eventualities. If he is willing to do the job T&M, that means that he is willing to share the risk that you may run into something unexpected that will cause the cost of the job to go up. If you give him an "idea" of the cost of the job, you will be expected to honor that "idea" as a maximum quote. Everything will be OK if the T&M comes in at less than the quote, but heaven help you if it goes over. Either give an estimate or do the job T&M, don't try to do both, it won't work.
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How would you answer to a customer the question "How much, rough idea"?
 
cowboyjwc said:
"Somewhere between $150 and $10,000. Could be more, could be less, but I wouldn't count on less."
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Kind of my thoughts as well. I just want to prepare them for $$$$ if it comes to that.
 
Explain to him that if he wants a quote you will give him one, but that it will include any possibility that you can anticipate AND the time that it takes to prepare a quote. If he wishes the advantage of a T&M job (only paying for the work that was actually done, etc) he will have to accept a certain amount of risk. If you are brave you could give him a "not to exceed quote". I will do the job T&M, not to exceed $_______. Just make sure that the maximum is enough to CYA no matter what happens.
 
Another possibility is to suggest a "Not to Exceed" price. You will perform up to that dollar amount, then stop. If the job isn't done, oh well.
 
I did mostly T & M and sometimes you could give a "guesstiment" because you know what it would take, but like everyone says it can be tricky.

I've gone on jobs not knowing what the hell was wrong and fixed it in 5 minutes and I've gone on jobs where I knew it was a neutral problem and spent 3 hours there trying to find it. You just never know.

As a rule the T & M price will always be lower than a bid price.
 
1793 said:
How would you answer to a customer the question "How much, rough idea"?
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What's the job. I can give a flat rate price on almost anything , it's going to be high but they will know in advance what the cost will be.
 
growler said:
What's the job. I can give a flat rate price on almost anything , it's going to be high but they will know in advance what the cost will be.
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There multiple aspects to this job. It?s a residential pseudo remodel. Kitchen being reworked, soffit removed cables need to be put into the walls. Some short so junctions in the attic will be needed. Add recess lighting in three rooms finished ceiling, rework switched receptacles to hot all of the time. Where walls were removed relocate wires, clean up hidden junction boxes from previous hack. Rework two bathrooms, only a small portion of this job is stud walled, the rest will be working with finished walls and ceiling. This is only a snap shot of the work needed. Oh did I mention, the original wiring is Aluminum.

Edit to add: I'll try to post some photos.
 
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1793 said:
Oh did I mention, the original wiring is Aluminum.
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See I told you I could quote a price. Whatever you normally get to rewire a house of that size. It's probably going to be a little over that 10K quoted by Cowboy.

I'm not kidding I don't fool around with aluminum. It may be safe but it has such a bad reputation it's not worth the risk ( to me that is ).
 
Don't know if it needs to apply

Don't know if it needs to apply

Here throw them a bone, its a building code issue that might or might not apply, the plastic vent pipe needs to be removed to be steel corrigated flex and hopefully vented to not more than a length of 6' to building exterior. It might effect your present layout ! ? ?
 
1793 said:
There multiple aspects to this job.
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I can't imagine starting a project like this as an HO and having no clue what it would cost me.

I would suggest giving him your best guess range and tell him that it is "if all goes well"... then give him a "if this that and the other goes wrong" range and tell him that you'll keep him up to date as you move forward. If he can't live with that uncertainty (or he passes out when you tell him the numbers), then move along to fixed cost bidding or just move along period.

I too thought cowboy's numbers were low... AFTER seeing the pics. I like the laundry room especially.
 
I see jury rigs and violations and buried boxes and who knows what else is lurking behind those sheetrocked walls. Either fix a price onto everything on an a-la-carte basis, or walk away.

Doing this T&M AND giving a "rough estimate" is impossible, so you'd have to quote to cover your ass, and that is surely cost more than T&M. The simple fact that you cannot predict how much time this is going to take is why you're going at it T&M. Coupled with the fact that the HO wants the security of a "guesstimate" just isn't practical, and doesn't consider your position at all.
 
It is the law in CA, for home improvement contracts, that a contractor must give a 'not to exceed' price (even for troubleshooting). I find this to be an offensive and lousy law, but it's the law just the same.
 
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