to bid or not to bid

For many homeowners a competitive bid is an appealing notion. After all, we all make cost comparisons while shopping. The difference in custom home building is that an estimate is based not only on a product but also on a service. What assumptions have been made within a given price? How timely and attentive to details will one contractor be compared with another? Some of these questions can be answered with a line-item breakdown, but it is not easy to extract a true apples-to-apples comparison. A detailed specification can provide a lot of information, but also requires a lot of time to coordinate, update and revise for the specifics of a project. Even then it is tough to define a level of attention to quality other than the industry standard.

Over the years we’ve sought a balance of specifying what is useful to customers and contractors, while allowing some flexibility to control costs. At the upper echelon of residential service and for commercial work in general, Architects will balk at this notion. As a profession we are compelled to provide a level of service that meets a certain standard. But how much documentation is appropriate for residential work with a limited budget? At one end of the spectrum, extensive documents and specifications can be burdensome for small contractors to manage and to estimate. At the other end, builders might be left with many unanswered questions and have to improvise on site. Much depends on the nature of the project, and one aims to provide an appropriate level of service for each.

As a small practice we strive to keep services and documents to a reasonable level. There should be enough information at a given stage to allow estimates within a cost range, and allow for a bid process should that be desired. A formal bid does require a higher level of detail, specification, and decision-making up front. It also requires several months to coordinate, administer, draw comparisons, and make a decision. Yet good residential contractors are often busy without resorting to the time-consuming and uncertain process of bidding. Depending upon timing and availability, some contractors might choose to pass on a project requiring a formal, competitive bid.

This is not to suggest that projects should ever start without a thorough estimate— an essential prerequisite to the start of construction. But there is much to be said for selecting a contractor early in the process. As a committed team member they can provide estimates as the plans are refined. They can also provide logistical support and input prior to the preparation of final construction drawings. Given a customer’s commitment and time frame, they are then able to schedule a project farther in advance. The relationship between the owner and contractor is crucial, and the sooner it is established and demonstrated, the better.

There is another approach between that of a formal bid and hiring a contractor outright, call it an invited estimate. Here the owner might interview several contractors, visit several projects and talk to previous customers. Two or three are chosen as candidates to prepare an estimate based on our plans. Generally the estimates can be quite firm on the structure, exterior, rough-ins, and all the work up to and including drywall. The finish work beyond that point can then be estimated with cost ranges for various trades and items. By going through an interview process and having a solid estimate in hand, an alignment can be found between the scope of a project, the owner’s expectations, and the budget. In our practice we’ve found that this approach helps to establish a rapport and comfort level for both the customer and contractor prior to the start of construction.