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General Contractors Sweat the Details
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| Who They Are, What They Do, How They
Charge |
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| By Jim Cooper
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Over the years I've been approached by people who, with a knowing
wink, say, "Don't try to tell us general contractors are worth
what they charge. We know better. We're not paying that kind of
money to someone to drink coffee and make a few phone calls."
I generally just wink back and say, "You've sure got that
figured out. I can see nobody's going to put one over on you."
Who am I to shatter someone's comfortable illusion? In all
likelihood, if those folks ever get to the construction stage of
their home, reality will adjust their attitude.
Most people know that a general contractor's markup accounts for 15
to 20 percent of a house's total cost. But what does the GC provide
for that hefty chunk of cash? The work of a GC falls into four major
areas: budget, schedule, quality control and administration. A fifth
area, risk, is also factored in.
Suppose you purchase a log home kit and ask me to serve as general
contractor. You give me a set of blueprints from the log home
manufacturer and ask me to prepare a firm contract price to build
your dream home. A considerable amount of work must take place.
First, I will discuss with you the exact details you wish included.
The blueprints tell me what your finished house will look like, but
you must specify what kind of heating and cooling system, trimwork,
kitchen cabinets, appliances and floor coverings you want. I'll need
to know if the woodwork inside the house (including the logs) will
be stained and varnished or if some of the wood will be painted.
Will there be tongue and groove on walls or ceilings? Will the
stairs be handcrafted or manufactured? Will some of the basement be
finished or will the house be on a slab or crawlspace?
We will probably spend two to eight hours hashing out such details.
Part of e,his time will be used discussing options
and how they affect costs.
One of the things I will ask is your budget or price range. Every
single item that goes into a house has a cost associated with it,
and most of these items have options. If you want a
2,000?square?foot log home with solid brass plumbing and lighting
fixtures and hardwood floors throughout (except for the baths, which
you want done in Italian marble), all for under $150,000, we have a
problem. I you give me a budget figure without specifying details
like lighting and plumbing ?that amount will guide me in choosing
options for you to consider.
When you give me your blueprints, I'll ask for a detailed list of
the materials included with your kit. Your assurance that
"everything you need will be there" is, I'm afraid,
insufficient to make me obligate myself financially to deliver you a
completed house. If your manufacturer has not provided a complete
list, specifying individual items right down to nails, 2?by?4s,
hardware, etc., as well as their grade and quantity, I'll have to
contact them for that information. The little sheet in the log home
sales packet that says something like "everything you need for
walls, roof and floors" is also too vague to serve as a basis
for a contract.
With blueprints, a complete material list and a list of all the
items that are not included in the kit, I can prepare a firm cost
for your project. This will be the basis of our contract and the
budget. I start with a computer form that I developed and have
refined from experience. It contains 57 line items, some comprising
up to 30 separate costs. For example, your foundation consists of
excavating, footings, walls, wall waterproofing, drain tile,
concrete slab and backfilling. While one person or company may
perform all of these, most likely several subcontractors or
suppliers will be involved.
I will fill out the form using estimates based on my experience
building other homes. If my initial estimate is outside of the
budget range we discussed, I'll contact you immediately to discuss
ways to reduce costs. If it falls within your expected price range,
I'll proceed to the next step: determining the contract price.
I'll use your blueprints, material list and finish details to
prepare bids for subcontractors. But before I send out bids, I'll
proofread your material list and blueprints, checking things like
window sizes, door sizes and swings, rafter and framing lumber
lengths and quantities. This may seem unnecessary because your log
manufacturer is responsible for all or part of these. However, if
the log company sends the wrong item, even though it agrees to ship
the right material, I'll have to rearrange the entire construction
schedule, spending time I hadn't budgeted, and you will be paying
construction interest during the delay.
After proofing your kit materials and blueprints, I'll perform a set
of "take?offs" to determine the quantities and cost of
materials not included in your kit. For example, if your kit does
not include the main level subfloor, I'll use your blueprints to
determine quantities and sizes for sill plates and insulation,
girder lumber, floor joists, plywood decking, lumber for blocking
and bracing, subfloor adhesives and nails. Other take?offs give me
quantities and specifications for partition framing, drywall,
insulation, shingles, T&G for interior surfaces, hardwood
flooring, ceramic flooring and carpeting, stair and railing
materials, trim and decorative molding, cabinetry, hardware,
lighting fixtures and plumbing fixtures. The material lists)
developed from my take?offs will go to several suppliers for
accurate price quotes.
Next I will prepare bid specifications for all subcontract work.
This can include footings and foundation, log setting and framing
carpentry, heating and cooling, plumbing, electric, finish
carpentry, painting and varnishing, roofing, fireplace installation,
and landscaping. I've devised a standard set of bid specification
forms for each area to assure that competing subcontractors bid on
the same work. It also keeps me from overlooking details. Completed
bid specifications and a set of blueprints go to each subcontractor
on my bid list.
I prepare the bid list based on subs that I have used previously and
the recommendations of home owners and other subs and builders.
Before I send a bid to an unfamiliar sub, I'll call about they
project and to get references.
Some items in your finished home will be difficult to price exactly:
appliances, lighting and plumbing fixtures, floor coverings and
cabinetry. Here, the choices (and cost ranges) are overwhelming.
Unless you specify manufacturer, make, model, color and style, I'll
price these things as "allowances," amounts included in
the building contract that covers the cost of an item but still
allows you to select the color, style, model or manufacturer. If the
amount runs over the allowance, I'll charge you the difference.
As subs and suppliers return their bids, I'll replace rough
estimates with firm price quotes. When all the bids are in, I will
prepare a construction contract, stating a firm price to build your
log home. In the contract, I will include allowance amounts and the
specifications used as the basis for your contract price. Clearly
stating what materials and methods form the basis for the contract
price protects both you and me. You have an opportunity to review
and question construction methods and materials before work begins.
I am protected in case you want to make changes that require
additions work or materials.
When your contract is complete, w will go over it paragraph by
paragraph. I everything is in order, we will sign, shale hands all
around and move on to th next step. Somewhere between one wee and
two years may have elapsed since w first talked, and I will have
logged 40 t 80 hours in preparing your contract.
Immediately after signing our contract, I will apply for your
building permit and any other permits required where you are
building and arrange the construction schedule. I'll notify all subs
and prepare purchase orders for materials. I'll remind them that I
must have verification of insurance before I let them begin work.
I'1 also file a Builder's Risk insurance polic on your project to
protect materials from weather and vandals. My goal, once
construction begins, is to complete you house as rapidly as
possible. "Rapid" to builder is not always
"rapid" to a homeowner, but I want to make sure that one
your house is up, it stays that way.
Throughout the construction process, I will be continually
re?adjusting the schedule. Materials will occasionally arrive late,
or the wrong items may be sent. Weather will force delays, and subs
may be late getting started. I will spend one or two hours a day
throughout the construction period, talking with subs usually before
7 a.m. or after 7 p.m. I'll talk with you several times a week and
meet you at the site on some weekends.
During the day, I will visit your job site and monitor progress. If
anything looks wrong, I'll ask the sub to correct it or call you to
choose among several alternatives. I'll compare measurements with
the blueprints and check framing for squareness, level or plumb.
I'll accompany building inspectors on any visits to be sure work
meets code requirements.
Throughout the project, I'll be receiving and paying invoices from
subs and suppliers. Before I issue checks, I'll have written
verification from their insurance companies that they are insured.
I'll review all invoices item by item to be sure that nothing was
billed twice or at a rate other than that quoted. When a sub's work
is complete, I'll get a written waiver of lien from them, indicating
that they have been paid in full. When your log home is complete, I
will issue a similar waiver as assurance that you will not be
receiving any surprise bills from subs.
My work does not end upon completion of your house. The law requires
that I warrant materials and workmanship for one year. If there are
problems during that time, I'll have the subs who worked on your
house correct the defect.
Finally, there is the element of risk. Because I provided a firm
contract price for your house, I am responsible for seeing that the
house specified in the contract is built for the price stated. If
I've forgotten something in my estimate, it's my problem and the
money will come out of my pocket. The rate at which unforeseen
expenses can multiply makes general contracting a very risky
business. It also results in some gruesome stories when
inexperienced home owners don't educate themselves sufficiently
before tackling their own home building project.
As you can see, being a general contractor is mostly attending to
details and knowing what details need attending to. That's what your
GC is or should be doing for the money you are paying. |
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