Need Help (Advice) Negotiating T&M

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  #1  
Old 05-03-11, 08:07 PM
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Arrow Need Help (Advice) Negotiating T&M

Long time lurker, first time poster. Something that's been bugging me for a while, need some help.

I need to hire a contractor. I've had him out to look at the job. The bid comes back - "T&M".

I'm not looking for a hard dollar bid - I understand T&M protects both of us.

But - I ought to be able to get some idea of:
- How many people
- How much time do they think?
- How much materials do they think?

Now I get that there will be times where, once you begin a job, there may be more damage that needs to be repaired. But I firmly believe that they should be able to estimate something.

Before I turn them loose, I need to know if it's a 2K job or a 10K job!

Any tips on how to push back, gently but firmly, and getting some good information?
 
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  #2  
Old 05-04-11, 04:34 AM
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Welcome to the forums Rob!

Get a couple more bids! 3 or more bids helps you to determine what the fair price is. T&M jobs are nice but generally aren't easy to get. You could ask for a cap on the open price. Not knowing what the job is - I'd expect there to be some firm bids although most will have a clause concerning hidden items that might pop up while doing the work.
 
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Old 05-04-11, 05:11 AM
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As Marksr says, get more estimates. That way you are fully armed. Don't be surprised if you get an firm estimate that is higher than the others who bid time and material. He will be attempting to figure in the unknown. I do that quite often in remodeling, because you just don't know what is behind walls, etc. Figure for the unexpected, and if I don't run in to it, I reduce my overall bill. My theory is, if you can live with the estimate, you can live with the bill. But I protect myself as much as I can, and leave an avenue for all else, while being fair in pricing.
Should something pop up that isn't expected or will cost quite a bit more, we stop work, call in the owner and discuss it, making a change order if necessary to cover the new stuff.
Good luck with the project!!

Larry
 
  #4  
Old 05-04-11, 09:50 AM
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Originally Posted by chandler View Post
Should something pop up that isn't expected or will cost quite a bit more, we stop work, call in the owner and discuss it, making a change order if necessary to cover the new stuff.
And that's exactly what I'm trying to minimize!

I have a fairly limited pool of qualified firms to choose from - pretty remote area. Lots of buffoons, I have confidence in these guys' quality of work; that's what makes it difficult. Additionally, I am on long-term assignment away from home, so I need to stick with folks I trust to be in the house and work safely while I'm out of country.

On this job, I'm looking to repairs years of water damage behind wallboard - so I get they don't know full conditions behind walls. But I also can't make an affordability decision AFTER they've torn out sheetrock!
 
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Old 05-04-11, 10:03 AM
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I'm looking to repairs years of water damage behind wallboard
Not knowing the job, the other factors aside from sheetrock, flooring, etc, How about upgrading any electrical or plumbing?

example: If your talking a average bath gutted with plumbing, electrical upgrades, fixtures, you can estimate 5K low-8K hi.

On average its $75-$100 hr labor. Material is usually written up 20% above cost. Then take that whole bill and add 10% to that.

Thats how most T&M contractors work in these parts.

Mike NJ
 
  #6  
Old 05-04-11, 10:10 AM
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Yeah, I know the labor cost and the material cost. What I don't know is estimated quantities. Two guys for a day? Four guys for a week? And I find folks tell me, "No, we can't really know until we get in there", which find hard to believe. Again, not looking for six-sigma predictive accuracy, but, need to know if I can even afford to have them open it up!
 
  #7  
Old 05-04-11, 10:29 AM
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Two guys for a day? Four guys for a week?
There are many carpenters on this site that will give you the info you need. You do need to be specific in your issue.

What area of the house are you concerned about? leak from bath, roof..etc

Do you have a basement, crawl, slab?

Outside wall, inside?

Plaster, sheetrock, tile cement board?

There are alot of things to consider. How fast do you want it done?

You can find a solo guy that say will take 3 weeks to complete, but may be cheaper then the "A team" that comes in and knocks it out in 3 days...

Give some detail and the guys will be glad to help you.

Good luck with your project.

Mike NJ
 
  #8  
Old 05-05-11, 10:48 AM
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1. Get references! Ask those people about their experience with the contractor(s), especially for T&M work. Ask them if they have a friend, neighbor, or relative for whom work was done by that contractor who may not be on the list. Talk to those people, too.
2. Check BBB
3. Check Angie's List
4. Get a written agreement that specifies you are to receive copies of all time cards and a complete accounting of subcontractor charges, and materials used for which you're being charged. There's nothing like having an 8'x8' bathroom renovated only to find that your bill includes charges for 20 2x6 studs and 32 4'x8' sheets of drywall.
5. Demand lien releases from all suppliers and subcontractors prior to final payment. Put that in the contract.
6. Because you are going to be so remote, hire a property management company to act as your agent to monitor the work and advise you of progress, administer payment on draws, and perform whatever other duties you may require. Turn away from any contractor who objects to those provisions.
7. The contract should specify that you(r agent) withhold 150% of the value of any punch list work until it is completed.

We deal with a lot of absentee homeowners because this is a vacation home region. I am usually the one to insist on these types provisions because I don't want to have to haggle over long distance about completion of the work and getting paid so I can move on to the next job. What is it with homeonwers that they don't want to protect themselves similarly?
 
  #9  
Old 05-06-11, 10:22 AM
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Tear out the wallboard yourself first (or hire someone for just that if you cannot get there) and then the contractors should be better able to estimate what they will need to do

From what you're describing, I would have a hard time giving a narrow range of expectations
 
  #10  
Old 05-09-11, 10:09 PM
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Thanks for the advice, folks. The thing is, I don't need to VET the contractor (i.e., check Angie's List)... I need them to give me a REALISTIC scope of work.

Just saying "Time and Materials" won't cut it.

Is there a way to push that point, specifically?

(I hear you on opening the wall myself, but where I'm at is, if I choose not to do the work now, based on the scope, I don't want a big open wall. At that point I'm married to do the project sooner rather than later.)

Isn't there a way for them to say:

1 - Open walls and inspect - X guys, Y hours, $Z
2 - POTENTIAL - Remove/replace joists (range from X guys Y hours $Z to A guys B hour $C, based on the following discoveries)
3 - Replace wall board - $M materials (+/- 20%) + X guys, Y hours, $Z
4 - Patch ceiling - $N materials (+/- 20%) + X guys, Y hours, $Z
5 - Paint - materials, guys, hours, $
6 - Not clean up after ourselves
 
  #11  
Old 05-10-11, 03:42 AM
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Not wanting to be argumentative, but you DO need to check out your contractor. I live and work in an area where there are many foreigners (Florida) that have second vacation homes here. Nice homes. Invariably they will hire the cheapest, unchecked crew to come in and do a basement renovation. Makes my life nice. I get to tear it all out and do it right, after the original guys are back in some other state laughing their tails off with the original money.
If you could get someone to give you your breakdown as you listed, don't be surprised at a high cost factor. They are putting their company on the line for their reputation. They don't want to underestimate things, nor do they want to scare you off by bidding high to cover their butts.
I find with most of my clients, pictures, emails explaining things, all work to everyone's advantage. If I get to a stopping place, I don't like to tell my crew to go home. I want them to work. My job is to get these pictures, contact the owner, get answers immediately and proceed. But you gotta trust your contractor.
 
  #12  
Old 05-11-11, 09:14 PM
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There is no question about the quality or reliability of the contractor. So, no, at this point, I do not need to vet the contractor.

I have several bids from several contractors.

They are all "T&M".

That is it.

I need more.

I am guessing that this is an impossible task.
 
  #13  
Old 05-11-11, 11:31 PM
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I think that maybe you need to break down the job into several stages. Have them give a detailed bid including expected materials, number of workers, hourly rate for work and estimated time for just the demolition. Then you would have adders based upon a range of specific damages found after demolition.

For example: The contractor would state that they would have three workers on site at a cost of X dollars per hour (or more likely, day) and that it would be expected to complete initial demolition in Y hours or days. Upon this initial demolition if more extensive damage was discovered then additional demolition would occur at some agreed upon cost rate. Remember that removal of debris IS a significant portion of demolition costs and it may require additional dumpsters or initially getting a larger dumpster at a higher cost.

Then an estimate could be made for the repairs IF the damage is all exposed under the initial demolition and an adder for additional repairs that may be discovered during extended demolition.

I think that getting a (relatively) small job, and unless you are talking about a several thousand square feet facility it IS a small job bid to this degree of specification is going to be all but impossible. Most small contractors will not bother to go to this detail and the larger contractors that do bid in this detail will not be interested in the job. Since you have already decided on a contractor I think the best you can do is get a minimum bid and then YOU put an upper limit on the cost. This constrains the contractor to the point where they may not be able to complete the job and you will then have to make the decision to hire someone else to complete the work, leave it uncompleted or pay the original contractor whatever they want for completion. If you have as much trust in your contractor as you seem then a straight time and material bid protects both the contractor and you.
 
  #14  
Old 05-15-11, 12:47 PM
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Originally Posted by Luana View Post
I think that maybe you need to break down the job into several stages. Have them give a detailed bid including expected materials, number of workers, hourly rate for work and estimated time for just the demolition. Then you would have adders based upon a range of specific damages found after demolition.

For example: The contractor would state that they would have three workers on site at a cost of X dollars per hour (or more likely, day) and that it would be expected to complete initial demolition in Y hours or days. Upon this initial demolition if more extensive damage was discovered then additional demolition would occur at some agreed upon cost rate. Remember that removal of debris IS a significant portion of demolition costs and it may require additional dumpsters or initially getting a larger dumpster at a higher cost.

Then an estimate could be made for the repairs IF the damage is all exposed under the initial demolition and an adder for additional repairs that may be discovered during extended demolition.
Yeah, this is what I'd like - everyone's reluctant to go that level of planning. I am continually shocked that folks continually get hired WITHOUT providing that.

My confidence in the contractor is in the quality of the workmanship and honesty; NOT in their ability to maintain scope. Hence this dilemma.

Thanks for your help, I will try to get this done!
 
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Old 05-15-11, 03:14 PM
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They might be reluctant to break the bid down that way because it means more work making the bid - if he just goes off of T&M, he doesn't have to do a whole lot of figuring before hand. I would press him to get those estimates. It is in both yours and his interest for you to know you can afford the complete job before starting. If he is a little slow on work, he'll comply. If he's real busy, he may not bother
 
  #16  
Old 05-18-11, 12:20 PM
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Originally Posted by marksr View Post
They might be reluctant to break the bid down that way because it means more work making the bid - if he just goes off of T&M, he doesn't have to do a whole lot of figuring before hand.
EXACTLY! That seems to be pretty normal, yes?
 
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Old 05-18-11, 01:07 PM
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What it boils down to is if a contractor is hurting for work - he'll bend over backwards to accommodate you. If he has plenty of work - he's less inclined to go thru a lot of trouble to get more work. That said, a lot depends on the individual you are dealing with.
 
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Old 05-18-11, 01:11 PM
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hi i am new user in forum can anyone tell me how to add friends
 
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Old 05-18-11, 01:19 PM
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Welcome to the forums alfaseo21!

This is a diy forum not a chat room. We help each other with different aspects of diy, although friendships may develop in the process.
 
  #20  
Old 05-18-11, 01:30 PM
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Hi Rob

A little dose of reality, and in no way trying to offend you.

You mention years of water damage. With that in mind, it's likely that you have rotted framing, mold, possibly rotted sheathing (if exterior walls), possibly requiring exterior work as well. As lawrosa also pointed out, there may be other trades that need to be brought in. There are an infiinte number of possiblities and such an estimate could take forever and still not cover all possibilities. You are asking the contractor to give you an estimate that will cover every single possibiity. No contractor will do that. My contracts simply state that if we come accross something unexpected, we will come to an agreement on the work to be done, and the price to do it before we go any further. It's fair to us, and to the homeowner as well.

Mitch's idea to open up the walls yourself is a good one. At least the contractor can get a better idea of what he is up against. If you have years of water damage, now is the time to take care of it, as it'll only get worse.
 
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