Let's say you get a call from an architect you work with regularly, telling you he's sending plans and specs for an extensive kitchen remodel. When you review the plans you realize that there's enough missing information to prevent you from assembling a complete bid on the job. What should you do?
Why Are the Plans Incomplete?
Start by figuring out why the plans are incomplete. You can usually get to the bottom of that by calling the architect or owner and asking some key questions. What you learn will help you make a sound decision about how to proceed.
Behind schedule. The project may already be behind schedule because the design phase took longer than expected. Maybe they couldn't wait until the plans were 100% complete because the kitchen needs to be finished in time for a social event like a wedding. If you decide to bid the job, be sure to account for the added difficulty of meeting a tight schedule.
Over budget. The architect may fear that the project is over budget and wants to see where the bids come in before he completes the design. In that case, you might gain an advantage by providing detailed breakdowns for parts of the job that might be deleted if the scope gets reduced. That will make it easier if you have to rework the estimate and will demonstrate that you've thought about the "value engineering" process.
Indecisive client. Some owners will never make the decisions needed to produce drawings that are 100% complete. In such a case, you have to bid the job with whatever information is on the plans. This might be a sign that the client will avoid making decisions all the way through the project. Some contractors dread these clients, while others relish the opportunity to write all those change orders. If you bid the job, be sure to factor in the added cost of reworking the estimate along the way.
Architect unaware. The architect and owner may not even realize that the drawings are incomplete. It sounds scary, but it happens all the time. Minor omissions are not a problem, but blatant ones make me wonder if anything else is missing. Is the structure going to stand up? Have all the code issues been verified? If there are enough concerns, you may not want to bid the job.
How to Approach Bidding
There are several steps you can take once you know why the plans are incomplete. In many cases, you can turn a problematic situation into a profitable job.
Document what's missing. Send a letter to the architect or owner listing the information you need before you can estimate the job.
Use allowances. If drawings are complete enough, prepare an estimate and proposal, provide allowances for missing items, and make it very clear that the allowances are just that — allowances for unspecified items. Compile a list of work that is not included, and if you really want to be a nice guy (or gal), provide estimates of what the excluded work might cost.
Give an estimate. Provide budgetary pricing based on what's shown on the drawings, and give estimates for what isn't (be sure those are labeled "budget estimate" not "proposal" or "bid"). Make it perfectly clear that you are not providing a firm price for the job, you're simply establishing an approximate cost for the work as shown (plus your best guess for what isn't). Most of my work is budgetary estimating, so my cover letter includes a paragraph that states, "The attached estimate is based on plans and specs dated X/X/XX and is provided for budgetary purposes only. This estimate shall not be construed as an offer to perform the work at the costs stated in the estimate." Be sure to consult with your lawyer before doing this.
Consult on the design. Offer to provide preconstruction consulting for a fee during the balance of the design process. This can be a tough sell, given that most clients think estimates should be free. One way around this is to agree to refund part or all of the fee if you get the job. The only other thing you can do is tell them you'll be happy to provide a bid once the plans are complete.
Is It Worth Bidding This Job?
Your decision whether to prepare an estimate should be carefully considered.
Consider the source. Did the plans come from an architect or client you have worked with before? If not, determine how she found your company. Maybe she has no intention of hiring you to do the work and is using your bid as a "check" number for her favorite contractor. Then again, she might have seen something you built or been referred by one of your past clients. Two signs that you're being used to check someone else's numbers are if the architect won't tell you who else is bidding the project and if she's reluctant to answer questions and only feeds you enough info to get your bid.
Is it a project you really want to do? This question applies to any project you take the time to bid, but even more so here. It takes more time to write a proposal for an incomplete set of plans because you'll need to establish realistic allowances and prepare a list of qualifications and assumptions. Odds are you'll spend extra time explaining to the client what's included and excluded from the proposal.
Does it fit into your schedule? This also should factor into any proposal but is even more important when plans are incomplete. Why spend the extra time bidding a job that won't fit into your schedule anyway?
Who else is bidding the job? Are there any favorites? Some contractors are notorious for low-balling jobs and writing large change orders later on. It's even easier to do that when plans are incomplete. A "plans and specs" mentality is extremely prevalent in commercial and government sector bidding. For example, if the plans show a toilet but not the drain, the "plans and specs" guys will call the drain an extra. It's a waste of your time to write a proposal when someone like that is bidding. Politely inform the architect or client that you can't be competitive with the other bidders but would welcome the opportunity to submit a bid if the competition changes.
Follow your instincts. Do the architect and client realize what you're working with? Do they understand how allowances can affect the final cost? If your gut tells you it will be hard to get paid for change orders and allowance overruns that are the result of an evolving design, you should probably pass on the job.
Bob Kovacs is the president of Constructive Solutions in Iselin, N.J. He can be reached by e-mail at [email protected].
