Download the complete “Smarter Way to Build” presentation by clicking the link on the “Resources” folder in the left column.
Ask the Right Questions !
Control the Cost
Identify the reimbursable items.
Identify what will be competitively bid.
Identify what will be self performed by contractor.
Lock in labor rates for self performed items.
Agree on fixed fee or percentage markup for all services.
Formulate incentives for timely / early completion.
Exclude or identify any contingency amounts.
Get budget price for project. GMP with 100% give back is preferred.
Project Cost Development
(Draft Language for a Project Bidders Template)
- Provide a proposed list of reimbursable items for the project and the cost for each item or the method of costing each item. (i.e. Monthly, weekly, per use, etc.) (Note: Pricing of these items may be included in final GMP proposal)
- Identify items to be competitively bid.
- Identify items to be self performed by DB / CMR contractor
- Provide wage / labor rate sheet for all items that will be performed by the company and not bid competitively. (Any employee benefits, including taxes, burden, fees or overheads should be included in labor rates)
- Provide proposed fee for DB / CMR construction services (Fixed fee or percentage markup) and identify all items to be included in this fee.
- Exclude or identify any contingency amounts.
- Provide a budget price for the project with all trade functions and / or project components listed. (Line item pricing is not required.)
Background Notes to Provide a Deeper Understanding
- Reimbursable items can be very open ended. Identifying these prior to the project can eliminate surprises and costly unknowns.
- By identifying the trade areas and suppliers that will be competitively bidding on the project, it is possible to know the amount of competition being brought to the project by the DB / CMR contractor. A better selection of bidders will provide more choices for both savings and quality services throughout the project.
- Every contractor will perform different trade services with their own workforce. It is more difficult to evaluate or compare prices on work performed by the DB / CMR contractor’s own work force. Knowing the type and amount of self-performed work allows for a discussion of the options for providing competitive pricing of this work.
- Clarification of the wage or labor rates being proposed by the DB / CMR contractor provides a more competitive bidding result when comparing the proposals of various DB / CMR contractors.
- Clarification of the DB / CMR contractor’s fee and fee structure also provides a more competitive bidding result.
- Different contractors will build into their proposals additional funds as a contingency for unknown factors. Project contingency funds are an important part of any project. Identifying contingency funds will further assist in providing a more competitive bidding result.
- The budget price can only be a benchmark or target price for a project until an actual scope of work for the project has been agreed upon, adequate Architectural and Engineering completed, and building component sizes, and Mechanical, Electrical, Plumbing and Fires Suppression needs have been identified.