How much of a % profit margin is typical for an estimate/bid?

[electrofelon]

$200/hr seems high to me even for the highest market areas. It takes a combination of years in the business, being a good salesman, advertising, personality, and luck to get enough clients that will pay that kind of money on a full time basis. If you are there that is great congratulations, but I dont see that as realistic for 98% of us. IT also of course depends on what sector of electrical work we are talking about.

 

[Strathead]

$200/hr seems high to me even for the highest market areas. It takes a combination of years in the business, being a good salesman, advertising, personality, and luck to get enough clients that will pay that kind of money on a full time basis. If you are there that is great congratulations, but I dont see that as realistic for 98% of us. IT also of course depends on what sector of electrical work we are talking about.

I thought the same thing. Even in California, with prevailing wage rates at $60 or more. Even those who can like Simplex and Siemens are at around $135 for travelers.

 

[gadfly56]

I thought the same thing. Even in California, with prevailing wage rates at $60 or more. Even those who can like Simplex and Siemens are at around $135 for travelers.

If you can find Simplex or Siemens techs at $135 they are probably moonlighting with the company van. Here in NJ those guys are upwards of $150/hr. Heck, my former employer is standard at $120/hr for contract customers. You call in off the street for a one time service and that'll be $150/hr with a 4-hour minimum, cash or credit card. And they get it.

 

[Strathead]

If you can find Simplex or Siemens techs at $135 they are probably moonlighting with the company van. Here in NJ those guys are upwards of $150/hr. Heck, my former employer is standard at $120/hr for contract customers. You call in off the street for a one time service and that'll be $150/hr with a 4-hour minimum, cash or credit card. And they get it.

as you can see, I am in Florida and they are in that range here. Us, we have to use a rate of $90 for a "journeyman" and a green helper in a truck. I guarantee we don't get any service work if we go higher. Not my company and I might just close the service if it was, but that is the way of it here.

 

[gadfly56]

as you can see, I am in Florida and they are in that range here. Us, we have to use a rate of $90 for a "journeyman" and a green helper in a truck. I guarantee we don't get any service work if we go higher. Not my company and I might just close the service if it was, but that is the way of it here.

Well I certainly won't dispute that I'm in a very expensive part of the country, if not the most expensive.

Is that $90/hr for the two of you together, or the blended rate for each of you individually?

 

[69gp]

What is a buyout?

As others have said it is when you go to buy equipment for the project.

just to give you a little history of how to do a buyout.

Project is listed to be bid. estimated at $500 k electrical.
breakdown of the major quoted items is as follows.
light fixtures $95,000.00
Switch gear $40,000.00
Fire Alarm and Security $25,000.00


there will be say 15 electrical contractors bidding the job to 6 different GC
the 15 electrical contractors send out for quotes to say a total of 8 different supply houses.
Now if I am selected as the electrical contractor. its like who wants to cut me a good deal.
you had 15 contractor bidding and 8 supply house. now you have one buyer and 8 supply houses. Now you control the pricing.


I generally send out for quotes to 5 supply houses. If I am low bidder I go to my 3 lowest bidders and ask for a buy price. whoever gives me the best price is who I will deal with to get the price even lower.

i know i can by the fixtures for 70K
gear for 32 k
FA for 21 K.

Light fixture pricing is usually by a rep so he quotes the same price to all the supply houses. Then the supply guys just throw lamps in along with the markup.


the big saving come when you can sub fixtures.

thats all folks

 

[Fulthrotl]

I thought the same thing. Even in California, with prevailing wage rates at $60 or more. Even those who can like Simplex and Siemens are at around $135 for travelers.

i agree with both of you.... and if you say
"I'm $200 an hour" they will choke and spit coffee all over their desk.
never use profanities like "$200 an hour" in front of someone who is paying you.

enter flat rate pricing. if i were bidding T&M, i'd be at $85 an hour,
and 15% markup on material. the same as most everyone else around
here would be doing work for.

now, if you do ellen's spreadsheet, and punch in the numbers, you end up with
what each billable hour you have to sell needs to bring in, to give you what you
want out of your business.

when i first did her biz plan, i had almost no expenses and overhead whatsoever.
as a one man band, with the hours i had available to sell, to make a decent living,
each of those hours had to bring in about $125. we usually can't sell 40 hours a week,
every week, so that number is what you need to factor in. it includes profit on material,
so a $2,400 residential service changeout ends up being two days of your life, when it's
all said and done.

when this topic has reared it's head on here in years past, the "nut" number for people
who shared it ran about $110 ~ $300, iirc.

btw, a lighting setup tech to program a system runs $1,800 ~ $2,500 a day. not a sparky,
just a guy with an ipad, a laptop, and a wifi hub.

 

[Strathead]

Well I certainly won't dispute that I'm in a very expensive part of the country, if not the most expensive.

Is that $90/hr for the two of you together, or the blended rate for each of you individually?

Two men $90 total. So mathematically $45 per hour. If we were to send just one man we would charge $65, but that is rare, which is the aspect I respect from my company. We don't like a person working alone.

 

[Strathead]

As others have said it is when you go to buy equipment for the project.

just to give you a little history of how to do a buyout.

Project is listed to be bid. estimated at $500 k electrical.
breakdown of the major quoted items is as follows.
light fixtures $95,000.00
Switch gear $40,000.00
Fire Alarm and Security $25,000.00


there will be say 15 electrical contractors bidding the job to 6 different GC
the 15 electrical contractors send out for quotes to say a total of 8 different supply houses.
Now if I am selected as the electrical contractor. its like who wants to cut me a good deal.
you had 15 contractor bidding and 8 supply house. now you have one buyer and 8 supply houses. Now you control the pricing.


I generally send out for quotes to 5 supply houses. If I am low bidder I go to my 3 lowest bidders and ask for a buy price. whoever gives me the best price is who I will deal with to get the price even lower.

i know i can by the fixtures for 70K
gear for 32 k
FA for 21 K.

Light fixture pricing is usually by a rep so he quotes the same price to all the supply houses. Then the supply guys just throw lamps in along with the markup.


the big saving come when you can sub fixtures.

thats all folks

I am really going to step in it here! I have zero respect for this approach. I said I was being sarcastic, and that was because I hoped and believed you weren't referring to this approach. Unless you are a member of two distinct cultures I won't name for fear of the racial tag, then what you are doing is bid shopping after the fact. There are cultures that intentionally leave money on the table for future negotiation and expect bargaining as part of the process, but that is not the typical American way. What you describe is bid shopping. Don't ask for a price up front if you aren't going to award it to the low bidder. Also I would be very surprised if the local suppliers would have any loyalty to you and offer you their best prices, because what is the up side for them? I expect the person who wrote this thinks what he is doing is OK. I don't. So my advice to others reading this, don't do it.

One of the most important principles I follow daily as a project manager and estimator is a saying I believe I made up. "Always remember, anything I do for you I will do to you!" Mostly I also think of it with "we" instead of "I" when dealing with other people. If a supplier says, "Hey what number did supply house A give you, I will beat it." I will first off refuse and second off, lose one notch of respect for that person. If I get pricing from a Fire alarm contractor prior to the bid and I use his number, I feel I have the right to ask him to figure out how we can save some money, but I don't have the right to demand he does, or especially go out after bid and ask other contractors to beat his price. And as stated above, for anyone who asks you to do that, remember the next time they are going to turn around and do the same thing when you give them a number.

 

[69gp]

I am really going to step in it here! I have zero respect for this approach. I said I was being sarcastic, and that was because I hoped and believed you weren't referring to this approach. Unless you are a member of two distinct cultures I won't name for fear of the racial tag, then what you are doing is bid shopping after the fact. There are cultures that intentionally leave money on the table for future negotiation and expect bargaining as part of the process, but that is not the typical American way. What you describe is bid shopping. Don't ask for a price up front if you aren't going to award it to the low bidder. Also I would be very surprised if the local suppliers would have any loyalty to you and offer you their best prices, because what is the up side for them? I expect the person who wrote this thinks what he is doing is OK. I don't. So my advice to others reading this, don't do it.

One of the most important principles I follow daily as a project manager and estimator is a saying I believe I made up. "Always remember, anything I do for you I will do to you!" Mostly I also think of it with "we" instead of "I" when dealing with other people. If a supplier says, "Hey what number did supply house A give you, I will beat it." I will first off refuse and second off, lose one notch of respect for that person. If I get pricing from a Fire alarm contractor prior to the bid and I use his number, I feel I have the right to ask him to figure out how we can save some money, but I don't have the right to demand he does, or especially go out after bid and ask other contractors to beat his price. And as stated above, for anyone who asks you to do that, remember the next time they are going to turn around and do the same thing when you give them a number.

First off never ever pass judgement on anyone you have never meet or dealt with before.
2nd item if someone wants to pic up extra $$ when bidding a job than my way provides that and its ethical.

The way I buy out a project is not price shopping its called negotiating.

Price shopping is when you get a price of say $50K for a light fixture package from vendor A. Than take that price and go to vendor B & C and say can you match or beat this price. I do not do this. I "ask" for a buy price.

The supply house can go back to the reps and the reps can go back to the manufacturer. There is plenty of money to be made for a contractor. If you are telling me you have never gone back to a supply house for a better price than I would say you are not doing your job for the company. And if you have ever gone back and asked for a better price than you are doing the same thing I am doing.

If a supply house figures I am screwing them over then they do not need to quote me. The thing is they still want to quote me. Its not like I only deal with one supply house. Its the same when I quote on private jobs I don't quote all the GC only who I want to deal with.

I don't price shop and never will. If a GC says I can have a job if I meet ABC electrical contractors price I won't do it.

hope this clears things up a little.

 

[Strathead]

First off never ever pass judgement on anyone you have never meet or dealt with before.
2nd item if someone wants to pic up extra $$ when bidding a job than my way provides that and its ethical.

The way I buy out a project is not price shopping its called negotiating.

Price shopping is when you get a price of say $50K for a light fixture package from vendor A. Than take that price and go to vendor B & C and say can you match or beat this price. I do not do this. I "ask" for a buy price.

The supply house can go back to the reps and the reps can go back to the manufacturer. There is plenty of money to be made for a contractor. If you are telling me you have never gone back to a supply house for a better price than I would say you are not doing your job for the company. And if you have ever gone back and asked for a better price than you are doing the same thing I am doing.

If a supply house figures I am screwing them over then they do not need to quote me. The thing is they still want to quote me. Its not like I only deal with one supply house. Its the same when I quote on private jobs I don't quote all the GC only who I want to deal with.

I don't price shop and never will. If a GC says I can have a job if I meet ABC electrical contractors price I won't do it.

hope this clears things up a little.

I'm not going to back down on this, however, it could very well be an issue with understanding written words. I will try to be plain. If you send a request for quotes prior to a bid, and you receive quotes based on a firm bill of material per plans and specs from say three suppliers you are morally obligated to deal with the low bidder unless or until they refuse to provide what is quoted for the price they quoted it. There are always exceptions to this, like having a falling out, but in my opinion if you can't look the salesman in the face and tell him exactly why you are using his lower number then I will pass judgement. Negotiate with the low bidder all day long just don't go to the next guy. You indicated that you wouldn't "price shop" and I accept that at face value, however if you go out after the bid and call all three supply houses AFTER USING THE LOW BIDDERS NUMBER to win the bid and solicit all three supply houses to give you a reduced number for the same product you are not bid shopping per se, but ultimately the results are the same. These supply houses are fully capable of calling their buddies and finding out what number the other supply houses gave and making sure they beat it. It is wrong. Another one of my rules is I won't release prices until a job has been awarded and bought out for this reason, but I am occasionally asked by those who don't know my policy.

If the above is not what you are referring to then no harm no foul, but if it is, then I do judge you and I would quite before I would do that at request of my company.

There are a ton of things that go on. I have certainly asked suppliers or more specifically the distributors for a cut (protection) at bid time on a job I really want. I then reflect that in my price. As far as going back and asking for a "buy" price, absolutely not unless we are doing some form of value engineering. And even then I will do my best to stick with the original manufacturer unless absolutely directed by the owner. I would be very mad at my suppliers if they didn't give me their best price on bid day. I would want to know why they now decided they could give me a better "buy" price and would not likely keep asking them for bids.

I know this can be a heated subject and I am sitting on top of my high horse, but I very much believe we need to conduct business in the most ethical way possible ina world where too many people are out trying to make a quick buck.

Perhaps not on this exact issue, but I know that many posters here have similar views because we are the ones who do our best to provide code compliant installations without cutting corners also. Which is part of the same thing.

 

[petersonra]

I don't see anything wrong with going back to a supplier and asking for a better deal. I don't think it is especially ethical to give them other supplier's numbers, but just asking for a better deal is not unethical IMO.

I also don't see anything wrong with cutting corners on an install where the corners cut still meet code and whatever the contract requires.

I personally think what most contractors refer to as "value engineering" is moderately unethical. Win the bid and then try to cheapen it after the fact without letting everyone else rebid it?

 

[Strathead]

I don't see anything wrong with going back to a supplier and asking for a better deal. I don't think it is especially ethical to give them other supplier's numbers, but just asking for a better deal is not unethical IMO.

Neither do I and if you read what I wrote I in no way said anything was wrong with it. One of the things I did say is it is wrong to go back to all of the suppliers and ask for better numbers on the same quote. I feel you are morally obligated to negotiate with the low bidder that you asked for quotes from in the first place. They were low on bid day at your request. They earned your business.

I also don't see anything wrong with cutting corners on an install where the corners cut still meet code and whatever the contract requires.

That isn't cutting corners. That is performing the contract. How would you ever describe that as cutting corners? I feel it misrepresents what I said.

I personally think what most contractors refer to as "value engineering" is moderately unethical. Win the bid and then try to cheapen it after the fact without letting everyone else rebid it?

I 100% disagree with you and actually feel the second sentence is unethical and here is why. You send a package out to bid. Those who bid it have taken the time and weeded through the documents. Often spending time writing RFI's and helping to solve design flaws prior to bid. They may even spend extra time, researching const savings for various VE items and either share them directly or give vague descriptions and a ballpark dollar savings (which is what I would likely do.) This is more than enough information for the General Contractor, Construction Manager or owner to decide who to select to work with on the project. All the bidders did there time, and one did it best (hopefully). Additional VE's redesign and attempts to minimize project cost are all efforts that someone is morally entitled to benefit from. You bid the job out, then say, gee contractor #2 was a little higher than #1, but he found that he could save us 20% by doing all these design changes. Let's go out to the low guy and see how much he is willing to do them for. Or as you stated, let's put it back out to bid again, now that everyone has had time to find out who bid the lowest and we know who we have to beat.

 

[petersonra]

Neither do I and if you read what I wrote I in no way said anything was wrong with it. One of the things I did say is it is wrong to go back to all of the suppliers and ask for better numbers on the same quote. I feel you are morally obligated to negotiate with the low bidder that you asked for quotes from in the first place. They were low on bid day at your request. They earned your business.

They have not earned anything until they get a P.O. There is no moral imperative to go with the low bidder. Used to be the engineering companies would sometimes throw out the low and high bidder and negotiate with the remaining bidder(s). Bidding should be a tool to get the best deal for everyone involved. Unless someone makes a bid with some other understanding, I just don't see an issue.

So what would you do if you asked for a bid on a million feet of red #12 THHN and ended up needing an extra 100,000 feet? You going to expect to get the extra footage at the same price? what happens if you only need 900,000 feet? You plan to pay the same amount?

That isn't cutting corners. That is performing the contract. How would you ever describe that as cutting corners? I feel it misrepresents what I said.

I don't know what you mean by cutting corners then. Are you using that as a term meaning they are deliberately violating the terms of the contract? That is well past cutting corners. that is just plain fraud.

I 100% disagree with you and actually feel the second sentence is unethical and here is why. You send a package out to bid. Those who bid it have taken the time and weeded through the documents. Often spending time writing RFI's and helping to solve design flaws prior to bid. They may even spend extra time, researching const savings for various VE items and either share them directly or give vague descriptions and a ballpark dollar savings (which is what I would likely do.) This is more than enough information for the General Contractor, Construction Manager or owner to decide who to select to work with on the project. All the bidders did there time, and one did it best (hopefully). Additional VE's redesign and attempts to minimize project cost are all efforts that someone is morally entitled to benefit from. You bid the job out, then say, gee contractor #2 was a little higher than #1, but he found that he could save us 20% by doing all these design changes. Let's go out to the low guy and see how much he is willing to do them for. Or as you stated, let's put it back out to bid again, now that everyone has had time to find out who bid the lowest and we know who we have to beat.

So cheapening up the project after the fact without opening it up for rebid is Ok with you? basically you are saying you don't have a problem with materially changing what was actually bid on after the fact and not giving the other bidders a shot at what amounts to a different project?

 

[69gp]

I'm not going to back down on this, however, it could very well be an issue with understanding written words. I will try to be plain. If you send a request for quotes prior to a bid, and you receive quotes based on a firm bill of material per plans and specs from say three suppliers you are morally obligated to deal with the low bidder unless or until they refuse to provide what is quoted for the price they quoted it. There are always exceptions to this, like having a falling out, but in my opinion if you can't look the salesman in the face and tell him exactly why you are using his lower number then I will pass judgement. Negotiate with the low bidder all day long just don't go to the next guy. You indicated that you wouldn't "price shop" and I accept that at face value, however if you go out after the bid and call all three supply houses AFTER USING THE LOW BIDDERS NUMBER to win the bid and solicit all three supply houses to give you a reduced number for the same product you are not bid shopping per se, but ultimately the results are the same. These supply houses are fully capable of calling their buddies and finding out what number the other supply houses gave and making sure they beat it. It is wrong. Another one of my rules is I won't release prices until a job has been awarded and bought out for this reason, but I am occasionally asked by those who don't know my policy.

If the above is not what you are referring to then no harm no foul, but if it is, then I do judge you and I would quite before I would do that at request of my company.

There are a ton of things that go on. I have certainly asked suppliers or more specifically the distributors for a cut (protection) at bid time on a job I really want. I then reflect that in my price. As far as going back and asking for a "buy" price, absolutely not unless we are doing some form of value engineering. And even then I will do my best to stick with the original manufacturer unless absolutely directed by the owner. I would be very mad at my suppliers if they didn't give me their best price on bid day. I would want to know why they now decided they could give me a better "buy" price and would not likely keep asking them for bids.

I know this can be a heated subject and I am sitting on top of my high horse, but I very much believe we need to conduct business in the most ethical way possible ina world where too many people are out trying to make a quick buck.

Perhaps not on this exact issue, but I know that many posters here have similar views because we are the ones who do our best to provide code compliant installations without cutting corners also. Which is part of the same thing.

its 3:45 PM Eastern time.Hope you have a day off because I would not be paying you for responding to this on company time by looking at the time-stamps. Don't want to be stealing from the boss. JK

When bidding a job there are a ton of bidders and all the supply houses quote the project. The day after a bid everyone knows there is only one low bidder and they come a calling. This is the way its done in in NE. If you think its wrong then you are just throwing money away. I would rather have that money in my pocket. And I do expose my pricing to anyone.

 

[Strathead]

its 3:45 PM Eastern time.Hope you have a day off because I would not be paying you for responding to this on company time by looking at the time-stamps. Don't want to be stealing from the boss. JK

When bidding a job there are a ton of bidders and all the supply houses quote the project. The day after a bid everyone knows there is only one low bidder and they come a calling. This is the way its done in in NE. If you think its wrong then you are just throwing money away. I would rather have that money in my pocket. And I do expose my pricing to anyone.

I am salaried. I am in the office at least 10 hours a day.

 

[Strathead]

They have not earned anything until they get a P.O. There is no moral imperative to go with the low bidder. Used to be the engineering companies would sometimes throw out the low and high bidder and negotiate with the remaining bidder(s). Bidding should be a tool to get the best deal for everyone involved. Unless someone makes a bid with some other understanding, I just don't see an issue.

And again the written word. I meant the lowest competent bidder and also meant one that you solicited. If you ask a person to give you a price and they give you the lowest competent price then you should use them. Otherwise you shouldn't have asked them for a price in the first place. I did also clarify that there are always exceptions and tried to clarify that by the statement that if you decide not to use the lowest competent bid you got you should be comfortable with looking the person in the eye and telling them the reason. Do you really think it is ok for example, for the estimator to ask for a fire alarm subcontract price from three contractors who the company works with. Then the job is awarded and it is turned over to the Project Manager for buy out. He calls up his buddy who was asked but didn't even bother to bid, but that is the one he "likes" to work with. And says, "Hey, so and so bid 38K on this project, if you can match that I want you on my job." Notice I didn't even go with asking him to do it for less which I consider even worse. I can tell you if I was on the screwed end of that one, I would not continue to bid to that contractor. Again give the benefit of the doubt, but the OP implies that he does a similar thing. He describes 8 supply houses bidding with the implication that after the bid he may go to all eight and find out which one will give him the best price. This is after he already got prices from however many he sent it to. It may be 8 but in my experience Contractors don't generally use that many different supply houses for one bid.

So what would you do if you asked for a bid on a million feet of red #12 THHN and ended up needing an extra 100,000 feet? You going to expect to get the extra footage at the same price? what happens if you only need 900,000 feet? You plan to pay the same amount?

This scenario is not in any way what I am referring to. But somewhat similarly I will say this. I bid a fixture package out complete. I expect my suppliers to be the experts. I give them counts, specs, plan pages, and fixture schedule. I want a price that includes all accessories, lamps etc. that come with the package. If there are linear lights I may give them run lengths or I may clearly spell out that they need to take them off from the plan, but I would expect them to take them off from the plan if I didn't state so in the request. Now, the job bids, and we find out that I missed a couple of 2x4's on a $30,000 package. Yeah I expect them to provide them at no additional cost as long as I discover it early on before production shipping. On the flip side, if I find out that I overcounted by two, I am equally not going to ask them to give me a credit. I will save that for the next time I mess up or need a favor. I believe in bidding with profit in the bid. Going in for nothing and figuring you will make it up later is not a business model I would ever operate under. If you read the OP's first post, that is exactly what he says he does. He does not put profit in his jobs. He makes it up on buy out. No thank you.

I don't know what you mean by cutting corners then. Are you using that as a term meaning they are deliberately violating the terms of the contract? That is well past cutting corners. that is just plain fraud.

I would be interested in what other people here think the term cutting corners means. To mean it means exactly that, fraud when you get right down to it. But if it isn't done every day in your area I would be surprised. I mean cutting corners. For example The spec says no more than three circuits in a conduit and someone sneaks four in going out to the shed. Or they use die cast connectors when the specs says steel, or Tartan electrical tape when the spec says Scotch 33. These are reasonably harmless, but there are pictures all over the internet of corners cut that are horrendous, and many of those are done because a person took a job for no profit figuring they could make it up.

So cheapening up the project after the fact without opening it up for rebid is Ok with you? basically you are saying you don't have a problem with materially changing what was actually bid on after the fact and not giving the other bidders a shot at what amounts to a different project?

Without any doubt at all, I have no problem with it and I don't understand why you do, honestly. There has to be a perspective and semantics issue here. If I went through a fair and honest bid process and showed my pricing to be the best competent price among invited competition then I earned the job in my opinion. Don't you think so? Subsequent to that the owner tries to find ways to reduce cost and he asks take my time and research and come up with some ideas using my expertise to reduce costs I just don't see how you or anyone would think it fair to send the job back out to bid with my ideas as the basis. On a related note. When I offer that service, I go through my subcontractor and vendor prices, and find the lowest competent price for fixtures, gear, lightning protection and ask them and only them if they are interested in participating in value engineering the project. If they said no (which none ever has) then I would ask someone else, but I would never go back out and try to get lower prices from others or expect them to compete again for a job they already competed for. It does happen, but I think there aren't many businesses that would continue to quote to a company who's business practices were that way.

 

[petersonra]

I would be interested in what other people here think the term cutting corners means. To mean it means exactly that, fraud when you get right down to it. But if it isn't done every day in your area I would be surprised. I mean cutting corners. For example The spec says no more than three circuits in a conduit and someone sneaks four in going out to the shed. Or they use die cast connectors when the specs says steel, or Tartan electrical tape when the spec says Scotch 33. These are reasonably harmless, but there are pictures all over the internet of corners cut that are horrendous, and many of those are done because a person took a job for no profit figuring they could make it up.

To me if the spec requires something, and something else is deliberately supplied, then that is fraud, and potentially even a crime.

As for the brand of tape, I have never seen a spec that required a particular brand of much of anything. Most times there is a generic statement that says something to the effect of the brand and/or part number is there as a guide to the level of quality required for such items. Sometimes there are very specific items that are called out, but I can't say I ever saw someone require a particular brand of tape.

I have seen the steel versus die cast requirement. It is pretty common.

I personally do not care if the specify the part number of the nuts and bolts. If that is what they want, as far as I am concerned, if I bid to their spec, then I should supply what they asked for.

 

[Ingenieur]

As far as the OP
Too many variables
bid vs negotiated
public $ vs private
risk
duration
location
lost opportunity
complexity/scope
size, as the value goes up margin goes down

as others have said get your raw costs accurate
add OH
add a contingency if you feel it is required due to unforseen issues or vague docs/scope
then come up with 2 profit margins
what would you like and think will get the work
the minimum you would do it for

then find the middle ground based on your comfort level, the competition, any legal/ethical 'in' you may have
it's an art as much as math

re: VE after the job
imo a bad idea, rebid unless rebid cost > VE savings, seldom the case
saves possible litigation and is fair

in general doing it after award via CO not good
you may get most of the cost back but rarely the oh & p
contractor gets paid for NOT doing work
very difficult to negotiate

usually you can make the engineer eat the re-bid costs if it is being done because it exceeds available financing that was obtained based on the engineers estimate
providing no owner driven scope creep after financing is arranged

 

[Ingenieur]

Minor VE is normal during any project
if a contractor finds a more efficient way to do something once into the work and it provides the same usability and quality why would I penalize him for being smart?

I may not even ask for a -CO, just keep it in my back pocket in case something pops up
as it always does
you scratch my back etc
as long as the owner/client is given full value and made aware of these arrangements I see no issue...bottom line is he must be happy in the end and long run