Things to Know About Construction Bids and Estimates

When planning your new construction or home remodeling project, you want to know the amount you will spend on it. In addition to knowing the amount you are likely to spend on the project, you also want to know the form in which your contract will be. Will it be a fixed price or time and materials?

A fixed price is also called a bid. Time and materials is also called an estimate or cost plus. When you know or understand the subtleties of the contract form, you can make a more informed decision.

Fixed Price

A fixed price or bid guarantees you that you will have a specific amount of work accomplished for an agreed amount of money. For instance, you can agree that a contractor will remove or replace three roofing layers of 1,000 square feet with CertainTeed composition roofing inclusive of starter flashing, underlayment and ridge vents for $5,000 including tax.

With a fixed price proposal, the costs should not exceed the amount agreed unless more work is added, changed or subtracted.

Some people prefer fixed prices or bids because the amount specified for the project should not be extended. Thus, changes orders are prevented.

Estimates or Time and Materials

Estimate of cost comes not as a bid but an estimate. The estimate details the line items and the tasks of a project. In addition to the tasks, an estimate provides general costs details or general conditions. These include cleanup, supervision, portable restroom, and materials handling. It also shows tax and markup and costs like liability insurance in some cases. What is included in the line items depends on the company and its approach to estimates.

A major advantage of estimates is the fact that you can compare them. For instance, you can take three estimates to compare and see the amount each contractor thinks your project will cost.

With this knowledge, it’s easy to decide whether to go for a construction bid or estimate.

How the Big Data Is Used In the Construction Industry

Just like in the other industries, in the construction industry big data is the large amounts of the information that keeps being acquired. This data comes from computers, people, sensors and other agents or devices that generate data. Naturally, that’s what makes the data big.

Big data exists in all records and plans of what has been built ever. It also keeps increasing due to additional input from different cranes, on-site workers, material suppliers, earth movers, and buildings themselves. The construction industry uses the big data in different ways including the following.

Design

The big data includes modeling and design itself. It also includes environmental data, social media discussions, and stakeholder input. This data is used to determine what to construct and where to construct. Using big data, it’s possible to determine the right place to build a facility. Big data analysis enables players in the construction industry to determine construction risks and patterns of new projects.

Build

Contractors analyze big data from traffic, weather, business and community activity to determine the right phasing for construction activities. Input of sensors from the machines that are used in construction sites show idle and active time. This information is processed to come up with conclusions on the best way to lease or buy equipment as well as use fuel-efficient equipment. This reduces ecological impact and costs.

Operate

Sensors provide big data that is used in the construction of buildings and bridges. This data makes monitoring construction at different levels easy. Energy conservation in buildings like office blocks and malls is tracked to come up with structures that conform to the best design goals. Information about traffic stress and flexing levels in bridges is also recorded and used in detecting unusual events.

Basically, the construction industry uses the big data in different ways. This data plays a crucial role of improving quality of the modern structures.

Why Bids by Contractors can Be Higher than Expected

After planning and saving for months, you could be ready for a project that will give you the living space you’ve always desired. You just need to find and hire a professional contractor to have the job done expertly. However, when you ask for bids from contractors, you may realize that their figures are ridiculously high. That means you have to start all over again or call off your project completely. But how or why did things turn out this way?

You Did Not Stress Test Your Budget against the Scope of Your Work

When bids by contractors are higher than expected, it means that you and the architects operated in the dark when budgeting for the project. Some architects do not have a sense of the costs of projects even after being in the industry for years. That’s because construction projects vary. Variables for comparing renovation projects vary among architect contracts, rules, and needs of clients. To avoid this scenario, take time to understand the scope of the work to be done.

Poor or Lack of Early Consultation with Contractors

Architects have the necessary expertise to build or transform buildings according to the wishes of clients. They know the best products and methods to help you achieve your goals. However, architects should work with contractors to know the amount the projects of their clients will cost. If an architect work alone, they will eventually come up with a project that may be way beyond what a property owner can afford.

Increasing Work Scope with Development of the Design

Naturally, you will be excited about your construction project. This excitement can make you add new items and upgrades without realizing their effect on your budget. Before you know it, little details will have accumulated dramatically. This means the contractors you approach will bid more than you may expect.

In addition to these factors, miscommunication can also prompt contractors to bid higher than expected. Therefore, communicate with contractors clearly and early to get bids that are within your range.

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How to Avoid Construction Disasters and Cowboy Builders

Cowboy builders have been around for a long time. These are individuals without qualifications and licensing yet they consider themselves builders. Working with such builders puts you at the risk of construction disasters. In addition to following unsafe construction practices, cowboy builders expose you to the risk of financial losses. But, how do you avoid them? Here are tips to help you.

Hire a Professional Contractor

Before you hire a contractor or a person that purports to be a contractor, ask them to provide prove of their professionalism. An accredited or certified contractor is the best to work with. That’s because this is an expert with knowledge of the best construction practices. They follow professional guidelines and adhere to the highest professional and industry standards.

Get References

Even after finding an accredited contractor, ask for their references. This will enable you to know the true character of the contractor. Take time to have a look at the properties that the contractor has worked on. If the owner of the building that a contractor has worked on can’t recommend them, think twice before you hire them. Only a client that has worked with a contractor will provide an honest review regarding their work.

Hire an Insured Contractor

Cowboy contractors change their names when declared bankrupt. This gives them a brand new name that makes them look like debt-free practices when this is not the case. To ensure your protection, work with an insured contractor only. Ensure that you have a developer insolvency insurance in place for your project.

Choose a Safe Payment Plan

To protect yourself, make sure that you have the right payment plan. Avoid paying a contractor too much upfront. Good contractors have funds to cater for upfront expenses of your project. They prefer getting paid after completing the work.

To avoid cowboy builders and the construction disasters associated with them, follow these tips. Always do your homework before you hire a contractor.