Contractors, Subs and pricing breakdowns?

Question

What do you guys do when your contractors or subs up their prices per hour or per job for an exactly same type of work. As we move markets from NWI to some various suburbs of Chicago I am just wondering what difference I may see in labor? We have materials basically locked down for a consistent price but the labor varies so much. I would love some input thanks!

Matthew Paul · Answer

Unless you are doing track homes , no two jobs are "exactly " the same .  If your contractors are raising their price to travel longer to the job , thats normal.  They have to cover travel time . Their employees pay starts at the employers shop and ends at the shop . If its 2 hours travel time back and forth and I send 4 guys ,the customer is paying for 8 hours of travel per day  Or 40 hours for the week . Its either built into the bid , or if the job is by the hour , there is a higher charge to cover travel .

Account Closed · Answer

@John Weidner Do you have contractors that are looking to place either general contracting bids or subs that need work in the Cary IL or Zion IL area? I am about to close on 2 deals!

Alex Applebee · Answer

I never ever pay per hour. I make them give me a flat price (to be changed w/the appropriate change of work order if there are any surprises). I also penalize for extended delays that are caused by them (not me if there is a schedule issue.) I don't really think it matters what market you are in, they should be able to bid a job this way.

I flipped in AZ and that is how I learned to run things, and now back here in CA I am helping a family member with some work on their house (sourcing subs, etc) and he insisted that everyone in this part of CA only does jobs per hour. I told everyone who came to bid the project that I wont pay per hour, I need a complete estimate on the job. Not an issue at all they all seem just fine with that. The one person that wasn't quoted me $55 an hour, said that's the only way he works and that's his price. I said that wasn't going to work. Two days later he  called me saying he could do it for $35 an hour. I said no thanks and went with the best priced guy out of the multiple others that were fine with bidding the job the way I wanted. Your money, your project, you dictate the terms. :)

Jassem A. · Answer

@John Weidner

Yes

John Weidner · Answer

Per day I hope.

Matthew Paul · Answer

Thats the PAY range for a laborer and a basic carpenter  in  Balto / Annapolis area .  What the contractors pay their help , not what they charge the customer .

Rose Borges · Answer

Obtain at least 3 quotes from licensed contractors and specialty contractors. Most of them quote lump sum with a brief description of work to be done. Their quote should include the amount of time to complete as well as any exclusions, i.e. material you are supplying. Obtain quotes even for small portions of the work. This way they are accountable for the time they take to do the work. The only increase from job to job should be for distance.  I rarely hire on T&M (time and material) basis unless it's a quick fix.

Once you receive the quote, negociate on the price. This forces them to justify their cost with more details, which gives you a better understanding or justifies your request for a lower price. You can also download your State's wage rate, which will give you a pretty good idea of what hourly wage you should be paying for each trade, regardless of their union or non-union status.

Don't play the "I can get a better deal with so&so game", it never leads to a WIN-WIN. Instead, let the contractor know that you'd like to rely on him for future work. Once you've established relationships with your various contractors, they will follow you anywhere.

Here's to your success!

Rose Borges, CMQC, LEED-AP

Jassem A. · Answer

Interview more people until you find people who will work work for a consistent rate which you think is fair.  Around here, I typically look in the $100-240 range for 7 hours of work.