Residential Estimating Delmar Cengage Learning by alicejenny


									   Chapter 11
Subcontractor Work
• Subcontractors perform 80% or more of the on-site work in
  residential construction.
• Often, the homebuilder merely coordinates the activities of the
• There are a number of possible problems that may occur with
  subtrade work:
   – Unreliability of some subcontractors
   – Errors in subtrade quotes
   – Overlap or gaps in the work subcontracted
   – Conditional quotes from subcontractors
   – Congestion at time of bid closings
              Unreliable Subtrades
              and Bid Errors (1 of 2)
• Subtrades may be delinquent in a number of ways:
    – Subtrades fail to submit the quotes they had promised.
    – A subtrade withdraws their quote after the estimator has used it
      in the price of the work.
    – A subtrade (whose price is accepted) does not do the work, or
      the work done does not meet requirements.
• One possible reason for these problems is that the subtrade
  makes an error when preparing their quote.
• If an obviously low price is received from a subtrade, they should
  be notified and given the opportunity to revise their price.
              Unreliable Subtrades
              and Bid Errors (2 of 2)
• When each subtrade’s work is not clearly defined, some items
  may be missed from the estimate or some items may be covered
  by more than one subtrade.
• Conditional bids from subtrades make it difficult to decide who is
  low bidder and whether the bids cover all the required work.
• In a bid competition, subtrades tend to submit their bid prices at
  the last minute.
   – This results in a large number of prices arriving in the
      contractor’s office just before the contractor’s bid is due to be
        Subtrade Pricing Process
• When subtrades are submitting prices in a
  competitive bid, the contractor needs to be
   – As soon as drawings and specifications are obtained,
     prepare a list of required subcontractors.
   – Inform subs that prices are required.
   – Obtain commitment from subs that they will bid on the
   – If a low price is received from an unknown subtrade,
     check them out thoroughly before awarding the work
     to them.
           Evaluating Subtrades
• When evaluating subtrades, consider the following:
   – The general reputation of the company
   – The quality of previous work performed by the
   – The quality of the company's management
   – The company's disposition in terms of their general
     cooperativeness and the ease of dealing with
     company site and office personnel
   – The financial status of the company
          Analyzing Competitive
             Subtrade Bids
• Subtrades may have different interpretations about
  the scope of work of their trade.
• Subtrades may offer discounts if a group of their
  prices are accepted.
• To deal with these complications, tabulate the
  subtrade prices, and then find the combination that
  covers all the work for the best price.
• See next slide for a windows example.
                              SUBTRADE ANALYSIS

 Project: Custom Home - Lennoxville                                 Page No:

TRADES: Flooring                                                        Date:

                                   Vinyl    Interior   Exterior
SUBTRADES              Carpet    Flooring    Paint      Paint      Discount         TOTAL

AAA Flooring.          $20,000    $900       NIC         NIC           ($2,090)        ---
                                                                  (If awarded both)
BBB Carpets            $17,500        NIC    NIC         NIC             no            ---

CCC Interiors          $18,900    $750      $2,220       NIC         ($1,000)          ---
                                                                  (If awarded all three)
DDD Painting            NIC           NIC   $1,850     $400             no             ---

EEE Finishes            NIC       $850      $1,980     $290            no              ---

Combination 1:          AAA           AAA    DDD        EEE             =          $20,950

Combination 2:         CCC            CCC    CCC        EEE            =           $21,160

Best Combination:       BBB           CCC    DDD        EEE             =          $20,390

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