An estimate begins as a (ballpark) estimate. The prospective job is compared to previous jobs with some similarities, and a price range is determined. For example, a 5 x 8 three fixture bathroom to gut and replace with new ceramic tile and fixtures can range in price from $11,000 to $23,000 depending on types of materials, desired style and design elements. If the customer’s budget is in this range or above, we move on to the preliminary design/budgetary estimate phase. The only way to meet a budget that is below the (ballpark) estimate is to cut material quality, reduce workmanship standards (which BCC will not do) or decrease the scope of the project. The customer may desire to do demolition work, painting or other work to reduce the price.
Preliminary Design and Budgetary Estimate:
After the preliminary design is complete, the project can be priced in more specific terms than the (ballpark) estimate, but not be detailed. The job is divided into 16 categories or areas such as doors, plumbing, electrical, masonry, etc. Based on past jobs, the estimate is parametrically scaled. For example, old job: 23 wiring points, 3 new circuits, 10 recessed Alzak recessed fixtures, $2,800 cost to subcontractor; new job: 10 wiring points, 1 new circuit, 4 recessed lights, estimate at 50% or $1400 cost to subcontractor.
As the design work progresses and becomes refined, so does the estimate.
The Final, or detailed estimate, takes the specific design and construction of that design for each of the 16 categories for each room/area and further divides it into it’s smallest construction element. For example, Master Bathroom: hang drywall, ceiling, moisture resistant, 75 sq. ft. would be one line item of a detailed estimate.
Every line item has one or more of the following costs assigned to it:
Material costs: (BCC costs)
Labor costs: (BCC installation)
Equipment costs: (rental cost or % of tool replacement cost)
Subcontractor cost: (cost to BCC. The estimated quote from the subcontractor is not obtained until the contract is agreed upon.) We try to overestimate this cost in anticipation that actual quotes will be lower. Any reduced cost will be passed on to the customer.
Allowance costs: (material/labor) These budgetary costs help the customer to control costs. At contract closeout, actual costs for these items will be compared to the allowance costs and the contract price adjusted accordingly.
Cost basis for detailed estimates:
Base reference: Adjusted for Washington/Metro area costs which tend to be for generic large scale projects and not tailored to specific job site conditions. RS Means Repair and Remodeling Cost Estimator; the National Construction Estimator; and the Home Tech Remodeling and Renovation Cost estimator are the guideposts for the base reference.
Past jobs of the same or similar work and materials (materials, subcontractors, and labor)
Current pricing of materials and subcontractors
Past experience (hands on labor)
Quotes/bids from subcontractors
Price = Direct Job costs + Project and Company Overhead + Profit + VA tax on materials
Direct Job Cost = Material cost to BCC + Labor cost to BCC
Overhead = 53% of labor and material
Profit = 10% of job cost and overhead
VA sales tax on materials purchased is 5%
Change orders must be approved in writing and paid in advance, or loan approval in advance.
BCC Pricing Policy
BCC is in business to provide its customers outstanding quality products, services, design and workmanship at fair, reasonable prices with no more than 10% profit.
Customer’s Price: all costs related directly to the contracted job, a share of the indirect costs required to operate BCC as a quality oriented company (i.e.: indirect job costs and a 10 profit margin).
Direct job costs: all costs for material shipping/delivery/handling; sales tax; storage; labor; subcontractors; equipment rental; design; engineering and all other direct costs. Note that labor costs are average to above average for exceptionally high quality work.
Indirect job costs: all costs related to BCC operations such as insurance, accountant, secretaries, office operations, taxes, vehicles, computer and software. The share or % markup that is charged to the customer as indirect job costs or overhead is determined annually and is based upon total business volume (i.e. gross contract price).
Overhead is 23% of the customer price or 30% of the direct cost. Therefore, when customers provide materials and contract for labor only or labor, equipment and some materials, BCC must recalculate the overhead as a % of the remaining contract costs. When the material cost is (X) labor, then materials are charged at BCC cost or are owner supplied and labor is marked up 70%.
When the material cost is (X) two times labor, then labor is marked up 100%.
Preliminary Design/design options $700 – 1500
Sketches by hand or Computer-aided design (CAD)
Design consultations/design ideas
Preliminary/budgetary estimate based $500 – 1200
upon either a preliminary design or architect’s drawing.
Estimating process $100/hr
CAD drawings for permits $1200 – up
CAD work – final plans
Detailed estimate for contract $500 – up.