Putting the Project Out to Bid – Part 2

Looking at the results from the initial bid process, it was clearly evident that the total cost of the project was beyond what I was willing to spend, and frankly beyond what I thought made sense.  So with that in mind, I approached the two highest-bidding builders with a proposal; would they be open to enter into an agreement where I act as general contractor for the overall project, but engage them to build the shell of the house?  More specifically, I would work directly with subcontractors to do the excavation, septic, well, plumbing, electric, HVAC, drywall, insulation, flooring, paint, etc.  And they (the builder) would handle the foundation, framing (interior and exterior), siding, roofing, and concrete flatwork.  There would be some areas of overlap.  For instance, I would purchase the windows and exterior doors, and the builder would handle their installation.

Doing this would allow me to save in two ways.  First, on all work that I directly contracted, I would save an amount equal to the builder’s profit margin.  And second, depending on how tight the budget was (and how much time I had) I could do some of the work myself. Things I had in mind were finishing the second full bath, installing the wood floors, installing the interior trim, installing the kitchen cabinets, building the kitchen island, installing the attic insulation, and painting the interior top coats in every room.  My goal was to get the total cost of the project (house and garage) as close to $400,000 as possible.

Both builders agreed to the potential arrangement, and submitted the following bids:

Download (PDF, 54KB)

In the end, the bottom line price had little to do with my decision.  My choice, when it came down to it, was to go with a younger builder who seemed to pay significant attention to detail (which I consider to be a positive attribute) and an older builder who has been in business for decades and had an interest in the Passive House concept prior to meeting me.  It wasn’t easy; in fact it was almost the flip of a coin.  Either of the bids, when put together with the rest of the project costs (which I pay directly to sub-contractors), appeared to allow me to get within reasonable range of my $400,000 “goal” for the entire project.  More specifically, I concluded that, depending on the quality of finishes that my wife and I decided on, the cost to construct the house and garage would be somewhere between $420,000 and $450,000.  That certainly wasn’t as “inexpensive” as I had initially hoped.  But it was a price I was willing to pay to see the project through.  So I pushed forward, and decided to work with Hugh Lofting Timber Framing out of West Grove PA.  Hugh’s been in business since the 70s, and although his business centers on timber frame construction, he has a deep interest in energy efficient homes, was finishing up a “Larson Truss” residence that was turning out beautifully, and attended Passive House training.  He also has a personality that I felt meshed with mine, and a character that I felt I could trust.



Putting the Project Out to Bid

In December, 2012, my architect had pretty much finished the house plans, so I was anxious to put the project out to bid.  I was undecided as to whether I wanted to be my own general contractor, and frankly I didn’t know whether I could afford to hire a builder to do the complete project.  But after giving it some thought, I decided that it would be best to start with the latter in mind.  So I started looking for builders.

I found three builders by going down to one of the local building suppliers that I frequented for materials used at my current house.  I found two other builders via my architect. One was the builder that gave me my first independent cost estimate.  The other was a local timber frame builder who coincidentally had an interest in the Passive House concept.  And I found a sixth builder by jotting down the name from the sign in front of a custom home that was being built a couple of miles from our current home.

I called all six builders, and although only two knew what Passive House was, every one expressed interest in the project.  I followed up by emailing each the plans and spec sheet, and suggested that we meet (individually) to discuss the project further if they still felt they were interested.  Two of the builders never got back to me after reviewing the plans, so I wrote them off.  But the other four followed up with an in person meeting, and all expressed interest. So I sent them the bidding instructions, plans, and specifications, and gave them a month to put their bid together.

As it turned out, only three of the four actually submitted a bid.  Here’s how they came in:

Download (PDF, 62KB)

I had several issues with the low bid.  First, he was the same builder who I paid for an estimate in early 2012, and his bid was now materially higher than his prior estimate.  It seemed to me that there should have been a greater consistency between the two. Second, his bid appeared to have a number of holes in it.  And third, his bid was materially lower than the other two bids.  From my perspective, these three facts indicated that he didn’t really put forth a meaningful effort, and I therefore couldn’t consider his bid reliable.  So I ruled it out.

Having narrowed it down to two contractors, I still had a problem; the cost to have a builder take on the complete project would just cost more than I was willing to spend.  So I fell back to Plan B; I would ask the two builders if they were interested in taking on the project with me acting as the General Contractor for everything other than the construction of the shell of the house…

The Lot – Part 2 – Storm Water Management, etc.

Understanding, and dealing with, the steep slopes issue was only part of the challenge with the lot.  While consulting with the civil engineers, I learned that there were several other issues that needed to be addressed if I wanted to actually build on the land.  Specifically (with the estimated engineering cost to design):

1. A storm water management system and drainage plan had to be designed – $1,145

2. A grading and erosion control plan had to be designed – $1,580

4. As a preliminary step in designing the storm water management system, stormwater infiltration testing had to be conducted – $1,550

In my Pennsylvania township, if you plan to construct a building that is more than 1,000 square feet, you must design and build a storm water management system to handle the water that is certain to run off the roof during a rain.  In addition, the construction plan must include a plan for grading the build site and ensuring that erosion is controlled.  So the civil engineering firm will performed this testing, create the designs, and assist me in obtaining the necessary approvals.

The septic system is a separate but related issue.  It cost about $300 to have the system designed, and will cost another $5,100 to have it installed.  Interestingly (and fortunately), a septic drain field is one of the two easy exceptions to the “you can’t touch the steep slopes” rule.  In my case, that’s exactly where it will go, and approval to put it there does not require an appeal to the planning commission.  FYI – the other exception is a driveway…if there is no other alternative.  Fortunately, I don’t have that problem.