Thread: Construction Pricing

I have to agree with Ray. After 50 years in the trade I still preferred to cost each job individually. No job is the same. Even if you are throwing up project homes, each site is different. The temptation to use a quick quote system is huge, particularly these days, with quick access to information on the Net. But often this info is general or inapplicable and it becomes a trap for young players. If you are the type of tradesman that feels he has to put a price on every job in his jurisdiction, like a male dog with a row of trees, then a quick quote system will be quite appealing. The other approach is to quote only on what you want. In other words, pick the eyes out of them. You can't get all of the jobs all of the time, unless you are under quoting. You can get some of the jobs all of the time by careful quoting and good communication.

Well I did say " This was for pretty standard construction with medium quality inclusions ". Take a bedroom, living or rumpus room extension etc - footings, sub-floor,walls, ceiling, roof. All pretty standard and it doesn't matter whether it's 5 sqm or 50 sqm. It was just a rough guide. We used to work it out on that rate and just apply any extra costs to anything out of the ordinary like beefed up engineering, commercial windows etc. I bought a copy of Cordells : "Housing Cost Guide" and worked out a couple of jobs using that. If I used that to price all my quotes, I wouldn't have got any jobs. It was way out. Mind you as you say I wouldn't use my per sq m rate to work out a complex job. I worked out a few by applying the per sq m formula then going through room by room and totalling it up that way. You can soon put together a reasonably accurate quote that way in a short time. The other way is to spend night after night working on one and pricing it down to the last nail but you may still not get the job. Experience and knowing both what to look for goes a long way. A decent set of specifications helps a lot too.

Stewie

No software to do this kind of job?

I use one for my regular woodwork and it gets complex quickly...

There is an abundance of software that will do the calcs BUT you would be surprised just how few trades, builders, estimators and quantity surveyors who don't know how to or cant interpret plans correctly and the interpretation, implications / affect on labour, logistics and correct sequencing of deliveries and manpower together with critical path time analysis is rampant. All this has a direct relationship to the data that is entered into the software.
There will always be the unforeseen problem hence and particularly on large jobs or huge projects there is always a contingency clause to cover / negotiate those unforeseen problems / situations.
Our very own state govt is experiencing this now with the west connex and light rail but there are also other factors at play in those two.

Seems a bit odd that at the design time that the architect or designer doesn't literally specify each component in the project.... Panels, composites, extrusions, even down to brands, product numbers and length of wiring....

So the builder literally is given plans and a data file with everything already listed.

No mystery or disagreements then!

The architect does specify brands, models, finishes but they dont have the rest of the skills or knowledge required to do the rest. As for the length of wire, go and consult your fairy tale book.

"You think a good builder is expensive? Wait until you have to pay for a bad one."

I deal with a lot of builders and thats one of the truest things I know. Same with materials: manufactured materials are all pretty uniform for the most part but you start playing with real wood and the cheapest timber to buy may be the most expensive once installed, or 5 years down the road.

"You get what you pay for " is another time tested axiom for a reason. Personally I have found that any customer who wants a job done for the cheapest possible price (within reason) is usually one to stay well clear of. People chip me all the time on price and my standard reply is a variation on the theme of "I'm not cheap, I dont have to be: I'm good".

A lot of it will come down to the type of job and what price range you are looking at. A simple one room extension to an average house is pretty easy to work out as per my guide above and homeowners usually can't justify the added expense of getting a spec written by the draftsman, building designer or architect or supplying any other kind of documents apart from the plans. A high end architecturally designed house however should come with a comprehensive specification. These can sometimes run to many pages and as to be expected cost a fair bit to produce. They do give you though a comprehensive list of what you should be quoting on. I usually run an Excel spreadsheet for any job and have found it to be one of the easiest and cheapest ways of quoting a job. I've had a look at some of the specialised building software over the years but could never justify the expense of most of them. I've also spoken to a few builders who have used them for a number of years and while they say some of them are good they are more suited to bigger companies as there is a lot of time needed for data input.

Stewie

Originally Posted by Stewie D

Well I did say " This was for pretty standard construction with medium quality inclusions ". Take a bedroom, living or rumpus room extension etc - footings, sub-floor,walls, ceiling, roof. All pretty standard and it doesn't matter whether it's 5 sqm or 50 sqm. It was just a rough guide. We used to work it out on that rate and just apply any extra costs to anything out of the ordinary like beefed up engineering, commercial windows etc. I bought a copy of Cordells : "Housing Cost Guide" and worked out a couple of jobs using that. If I used that to price all my quotes, I wouldn't have got any jobs. It was way out. Mind you as you say I wouldn't use my per sq m rate to work out a complex job. I worked out a few by applying the per sq m formula then going through room by room and totalling it up that way. You can soon put together a reasonably accurate quote that way in a short time. The other way is to spend night after night working on one and pricing it down to the last nail but you may still not get the job. Experience and knowing both what to look for goes a long way. A decent set of specifications helps a lot too.

Stewie

I understand your logic, but the reason for taking an alternative point of view was to prevent young blokes thinking that such a system is all powerful. It is not. I think it would be fair to say we all use a bit of a system when it comes to the basics. The difference is, where we determine the cut off point. I would never use a formula for calculating logistics or, for that matter, allow logistics to be included as part of the labour calc formula. Each job is different and that is where the system can come up short or too high. For instance, if you have a multiple of jobs in the same street, all under construction at the same time, the logistics factor becomes quite different than two jobs, each on opposite sides of town. To me, an Architect's drawing and spec were little more than a guide and a concept. After all, they are not the most practical people in the world. As for night quoting? Not on your Nelly. That is when mistakes get made, or you have to go to a formula system that can take over when the old head starts to shut down. And even then, the system is theoretical, not practical and building is 90% practical and only about 10% theoretical. Sooner or later, the old noodle is going to have to come into play. Admittedly you have the luxury of not using up your grey matter until you have won the job. For my mate, that was way too late. To me, every job was worth serious consideration - Hence only quoting what I was interested in. Degree of difficulty can work for you, if you put your mind to work. It doesn't have to be a stumbling block. Often jobs get chucked in the too hard basket because of their complexity. Particularly Architect conceived projects. A bit of practicality can often overcome the insurmountable clap trap the boffin has put on the page and this can lead to a nice little earner for a thinking person.

Rusty has put the role of the architect and software in perfect context.
I also use a spreadsheet, fairly simple, apart from qty x unit cost = purchase/labour cost, it also breaks it into cost per stage / progress claim so you know where and when your critical cash flow points are. Its not rocket science, just basic common sense and logic.

The other major factor in building is having good reliable subcontractors that you can rely on to be there when you want them and do a good job. It is pointless getting the cheapest subbies if they are unreliable and don't do a good job because at the end of the day you are left with an unhappy client and possibly expensive or unwanted warranty issues and rectifications.

The one area that is a constant battle for any builder or contractor is time. We all know how long it should take but in reality it always takes longer for many and varied reasons.

Sub contractor does not stand for substandard. It stands for subordinate. Well it did on my jobs.

The public’s perception of architects is interesting. They cannot produce a job to a clients budget or timeframe, think that because they can draw it with a pencil someone can make it and forgoe basic practical design principles over artistic design and take no responsibility when things don’t work out and yet the clients think that everything they say is gospel and everything the builder says is a lie.
i have worked with some of the top architects who’s fees would buy you a house in lots of areas and they are no different to the others in this regard
As far as quoting jobs goes, I will give an indicative budget estimate for a job but the client has to pay me a fee ($1,000) if they want a comprehensive fixed quote, the fee is refunded to them if they proceed with the job though.
Quoting work is costly and time consuming and there are too many tyre kickers out there chasing prices from as many builders as they can, often on things out of their budget.
My view is that no other profession does that much work for free so why should a builder!

Hi all on this thread. Often even when you do quote exactly as per architects specifications along comes another competitor who start to include cheaper items similar to the specified items only to throw another curveball at the tendors ! Whaf ever happened to the gentlemans aggreement when a hand shake was better tgan a signed contract ?

The comment on time really hit home.

As a sawmiller we see this all the dammed time - the guy who walks in the door and wants about half a house by next Friday. And its hard to give it to them.
It takes time for wood to dry from green to a point where we can grade it so... up here at least the industry runs on GOS hardwood. And as soon as you start sending GOS you know that there will be a percentage that drop out of grade as they lose some water. As a mill I dont care: you order GOS you pay the same as for graded hardwood without us having to double handle the boards. But its bad for business... mine, the builders, everyones really. It costs time and money to replace timber once its installed and the solution was as simple as order it 5 weeks in advance so it could be dry enough to grade and we could see the defect that wasnt visible with wood that wet the leaves were still turning brown

We got one house order on our books for 6 months out... all of it, big traditional Queenslander. Once upon a time everyone ordered timber that way... you knew you were going to be building a house so you contacted your timber supplier with a list and told them you wanted delivery on the X day of 3 months hence. And it arrived on time and all was well.
Now it seems no-one wants to order until the last minute, and all that does is make life difficult for all concerned... even if you got a hardware shop in between me and the builder theres still wood to go on trucks and... I don't know the why of this thing. What happened to the building game that none of you are organised enough to know you're going to a job next month? Reno's are different you never know what you got until you lift the roof and take some cladding off... but new work?

Off to cut 56 8x3's for the weekend... in a rush... yeah, I hate bloody builders.