Choosing a Contractor by Competitive Bidding

An important service that we perform as Architects is guiding our clients through the bidding or negotiation process. While it’s not the only way of selecting contractors, some of our clients prefer having a few qualified builders submit bids as a way of competing against each other to win contracts. Bidding can be a good method to select a contractor as long as the process is carried out in a way that is fair to everyone and with the understanding that price alone is not the only basis for selection.  During your initial meetings with an Architect, it is important to determine what approach you want to use to select a contractor.

For bidding to work as a valid selection process, several factors need to be considered:

1.      Bidding documents need to complete, detailed, and contain all the information required to develop an accurate price for the work to be performed. If the drawings and specifications do not contain enough information for the contractor to accurately price the work, they will almost certainly add to their bid to cover themselves from having to eat the costs of vague or poorly documented work items. Incomplete information in bid documents forces the contractor to make assumptions and leads to inaccurate bids, which almost always costs the homeowner more.  A common mistake people make is to try cutting project costs by negotiating a reduced fee from the Architect in exchange for a less developed design package, or in choosing an inexperienced designer or draftsman to prepare the plans. It is a worthwhile investment to spend a little more up front for quality drawings and specifications, with the payoff realized in lower overall project costs and reduced headaches. Creating quality bid documents is one of the many ways an Architect can add value to your home.

An architect's plans should be complete and detailed.

2.      Bidders should all be in the same “league”. Before choosing potential contractors and asking them to bid a project, it is a good idea to research the candidates and talk to their references. They should have a proven track record of successful completion of projects that are similar in scope to the one they are being asked to bid. A construction company with a few employees that uses a pickup truck for an office is going to have a lot less overhead than a bigger company that has an office with support staff, provides benefits for their workers, and is well insured. Figure out the level of service you want from a contractor, and choose your bidders accordingly.

3.      Limit the number of bidders to three at the most.  Any more than that and you will be spending time and money responding to lots of questions. It takes a lot of time for a contractor and his subcontractors to develop an accurate bid, and it’s time they often don’t get paid for. If there are too many competitors, some may opt out or not spend enough time creating their bids, and the results will be skewed.

4.      While contractors are preparing their bids, make sure any information that is communicated gets to all the bidding parties. It’s common to have a contractor call and ask for clarification, substitutions, or for information that is not in the documents. For bidding to be fair to all, written addenda or clarifications need to be sent to everyone and become a part of the bid documents. This can be time consuming, so clients should be willing to compensate Architects for the time it takes to make sure bidding is done properly. Well prepared drawings and specifications can help minimize time spent responding to inquiries during bidding.

A reputable contractor will build a quality home at a fair price.

One important thing to consider before deciding if you want to award a contract by competitive bidding is what the priorities are for your project. Bidding can be a way to get a project built for the lowest cost, but sometimes construction quality can suffer in this type of relationship. If creating a high quality home is your top priority, it may be better to select a reputable contractor early in the process, foster a good relationship with them, and then develop a project budget that everyone can agree on before signing a contract.  A good contractor knows who the best subcontractors and suppliers are, and unless one really stands above the rest, can secure the best quality at the best value by providing at least two bids from most of them.

Tom Russell, LEED AP and John Hendricks, Architect AIA, NCARB

There are many builders in the Northwest who build quality heavy timber construction. If you are interested in creating a mountain style home, we would enjoy the opportunity to work with you on the design, and can recommend some excellent Contractors.  Hendricks Architecture specializes in the design of timber mountain style homes and cabins.  While it is not the only type of architecture we design, most of the homes we’ve completed are in mountain resort areas throughout the West.  If you are interested in a mountain home, or you have any other inquiries, please contact us.

Hendricks Architecture, mountain architects in Sandpoint, Idaho.

.

Please feel free to leave a comment or question!

Subscribe to Hendricks Architecture’s Blog

Leave a Comment 

Good Contractors Add Value

Building a new home or remodeling an existing one should be a fun and rewarding process. If you are considering building a home or remodeling, the quality of your experience will be largely dependent on your approach to the project and the decisions you make.  Besides hiring an Architect, one of the most important decisions a homeowner needs to make on a project is hiring a good General Contractor.

While an Architect can easily design a home from abroad, it is almost always a good idea to hire a local Contractor if possible.  Good Contractors generally have their own tried and true framing crews, as well as access to the best available local subcontractors and materials.  If cost is an issue, and it almost always is, buying local can be a big cost savings (assuming they meet your quality criteria).  On the other hand, a good Contractor may know of a great cabinet maker who is two hours away but is well worth the price.

A Contractor can also help you get the best value for your construction dollar.  Not only is the quality better, good contractors also stay current on the latest construction materials and technologies.  Along with the architect, they can select materials and systems that enhance your home without breaking the budget.

A bad Contractor may provide cost savings in many cases, but in the long run they may cost even more money, not to mention your piece of mind.  Some horror stories I’ve heard and have sometimes witnessed from under qualified or disreputable Contractors:

• Building into the setbacks
• Building onto somebody else’s property
• Building a home at the lowest elevation in the center of a property, creating an unintended moat around the home
• Houses that leak
• Missing insulation
• Insulation that is not the specified R-value
• Walls that aren’t straight when they’re supposed to be
• Framing studs farther apart in an effort to reduce material costs, and then using those materials on other projects
• Gaps between adjoining materials when they are specified to be connected
• Contractor not insured
• Building differently than the plans specify without consulting with the homeowner and architect
• Building without a permit

A good Architect who is involved in the project’s Construction Administration should catch most of these issues before they become problems.

Good contractors will also add value by increasing the resale value of homes.  A custom home that is built by a contractor known as the best in town will certainly sell for a higher price than one built by a Contractor known for building low end spec homes.  A smart buyer who uses a home inspector before purchasing will hear the same thing pertaining to the quality of construction and the lack of problems.  Good contractors want to uphold their reputation.

I believe it is a good idea to get a Contractor on board as soon as possible after hiring the Architect.  This gives you more time to look at the different candidates, and if there is a contractor that stands out and you’re pretty sure you want to hire them, they can provide input during the design process.  A good Contractor can provide valuable insight on the costs and availabilities of various materials and methods of construction, and may also provide creative ideas in brainstorming sessions with the Owner and Architect.  Frank Lloyd Wright was an egotist, but most architects these days understand the value of collaboration.

Contractors can also add value by giving you some budget numbers during the initial design of the project, and update these as the design progresses.  During the pricing of the project, he (or she) will thoroughly review the plans and notify the architect of any discrepancies or missing items.   An honorable contractor who has done a careful review will then price out the project with a firm number, and will adhere to that number, barring changes made by the Owner or Contractor.  Some Contractors will give a low price to get a job, and then may try to add 25% onto the costs of a house through overlooked items to generate a nice profit.  These are often in the form of Change Orders.  A good Architect should be able to minimize Change Orders by providing quality, thorough drawings and specifications.  I will add an article on how to hire a Contractor in the near future.  See also Good Quality Architecture Adds Value To Your Home.

John Hendricks, Architect AIA

Hendricks Architecture specializes in residential design and is located in Sandpoint, Idaho.  We specialize in residential design, most specifically in the design of mountain style homes and cabins, though we have successfully designed in several different styles.  We take a fresh approach to every project, making every home unique, and enjoy designing above and beyond the Owner’s expectations (in a good way).

Subscribe to Hendricks Architecture Blog.

.

1 Comment 

A Great Time To Build

Construction prices are at historic lows, as described by Tom Russell of Hendricks Architecture.

Something unusual happened to me the other day. I walked out of the local lumber store and was shocked when I looked at the invoice for my purchase. Being shocked by the lumber invoice was not at all unusual, what was unusual is that I was shocked at how much it didn’t cost. My home is a perpetual remodel project, and because I have been buying a lot of material, I watch building material prices closely. I can’t remember when lumber prices have been this low, though it makes sense when you think about it – lumber suppliers have a large surplus due to the lack of demand this past year. Apparently the law of supply and demand is still being enforced.

Local builders that John Hendricks and I have been talking to are finding the same thing. Many of them report that they have been bidding projects 20%-30% lower than they were just a year ago. While lumber prices are a big part of the savings, many builders and their subcontractors are anxious to stay busy and are willing to forgo some profits to do so. Keeping good, valued employees working and maintaining momentum are oft cited rationale for reduced contractor fees. Increased completion is a factor as well. Most of the contractors I know in this area are staying busy preparing bids for clients, many of whom are shopping for the best value for their construction dollar.

Sandpoint, Idaho home by Hendricks Architecture under construction.

RMR Group is a builder in Big Sky, Montana that we maintain contact with. They recently had a client come back to re-bid a home that was not built in 2007 because the price was too high. Due to subcontractor, material, and fuel price reductions, RMR Group’s 2009 price for the exact same house was an amazing 33% lower than it was in 2007.

Quality is as good as it ever was, even with the lower prices.  Because of the economy, lower tiered employees and subcontractors have been weeded out.  The best employees are being kept, meaning you get the best people on the job.

I’m not an economist, but my sense is that the pendulum of home prices and construction costs has shifted from a historical high point to a new relative low point. I would expect that prices will end up somewhere between the construction boom we were seeing 2 years ago and the bargains we are seeing today. For anyone sitting on the fence waiting to start a big construction project, it would seem that this is as good a time as any we will see in the foreseeable future. I intend to seize the opportunity and build that barn that I have been waiting so long for!

Tom Russell, LEED AP, Project Manager

Hendricks Architecture, mountain architects located in Sandpoint, Idaho.

Subscribe to Hendricks Architecture Blog.

1 Comment 

Is This A Good Time To Build?

It seems that all you hear these days is bad news about the economy. While it is definitely a tough business climate right now, there are also opportunities to take advantage of bargains, especially in the housing sector. If you have been considering building, this is an excellent time to get the most for your money by seizing opportunities that present themselves in a down economy.

Real Estate Prices Are Low:

There are plenty of great mountain and lakefront properties available now, and prices are more reasonable then they have been in the recent past. Existing home prices are also down, so it may make sense to buy an undervalued home in a great location and have us help you transform it into your dream home.

Contractors Are Competing For Projects:

Because of the slowdown in building, contractors are forced to be more competitive to win projects. This means you are likely to get the best value for your construction dollar, and you may be able to get that contractor who is normally booked for years in advance.

Building Costs Are Low:

Because of increased competition between material suppliers and a surplus in materials, now is a good time to get building supplies at good prices. Gas prices are currently as low as they have been in years, so delivery and excavation costs are a bargain compared to a year ago.

Now Is A Good Time To Start Design:

If you are considering doing a remodel or building a new home next spring or summer, now is the time to get the design process started. It is a good time to build, and we would love to talk to you about the great opportunities available today.

Consider Remodeling:

If current economic conditions are preventing you from building now, it might make sense to improve your current home to increase its resale value or help it sell quicker. We can help you make your home stand out from the rest.

John Hendricks, AIA Architect, NCARB

Tom Russell, Project Manager, LEED AP

Hendricks Architecture, Mountain Architects in Sandpoint, Idaho

2 Comments 

Spokane Mountain Home Contractors

As an architect, one of the most important aspects of my job is lining up homeowners with the right general contractor.  Each project is different, so finding the right fit will vary.  There are roughly 200 builders listed in the Spokane area.  Following are builders in Spokane who I believe have the capability to do a good job on a mountain home with the right plans.  Some are better quality than others, and there are some I would only recommend on certain projects, depending on an owner’s desired quality, style, type of construction, scope and budget.

If you want more information on these contractors, or want to know who might be a good fit for your project, please feel free to contact me.  I am including their contact information and any websites if you would rather contact them directly.

There may still be some diamonds in the rough that I’m not familiar with.  If there is a contractor out there who feels you should be included on this list, please contact me.  I would love to see projects you’ve completed and are currently working on, along with references.

Doric, Inc. (509) 951-4022

Eaglepointe Construction (509) 363-0009

Ramey General Contractors (509) 483-9000

.

John Hendricks, AIA, NCARB

Hendricks Architecture

Leave a Comment 

Coeur d’Alene Contractors

As an architect, one of the most important aspects of my job is lining up homeowners with the right general contractor.  Each project is different, so finding the right fit will vary.  There are roughly 200 builders listed in the Coeur d’Alene area, but only a certain number that I would feel comfortable recommending at such high end neighborhoods as Black Rock and Gozzer Ranch.  Following are builders in Coeur d’Alene who I believe have the capability to do a good job on a mountain home with the right plans.  Some are better quality than others, and there are some I would only recommend on certain projects, depending on an owner’s desired quality, style, type of construction, scope and budget.

If you want more information on these contractors, or want to know who might be a good fit for your project, please feel free to contact me.  I am including their contact information and any websites if you would rather contact them directly.

Campbell & Campbell (208) 660-5416

Edwards Smith Construction (formerly Edwards Construction) (208) 765-8602

Gunder Homes (208) 667-7398

Idaho Builders (208) 691-7500

M.B. Builders (208) 772-2799

Sierra Builders (208) 667-0584

Stewart Construction (208) 772-8366

There may still be some diamonds in the rough that I’m not familiar with.  If there is a contractor out there who feels you should be included on this list, please contact me and show me projects you’ve completed and are currently working on, along with references.

John Hendricks, AIA, NCARB

Hendricks Architecture

Leave a Comment 

Sandpoint Contractors

As an architect, one of the most important aspects of my job is lining up homeowners with the right general contractor.  Each project is different, so finding the right fit will vary.  There are currently 65+ builders listed in the Sandpoint area, a hot bed for mountain home construction.  Following are builders in Sandpoint who I believe have the minimum standards to do a decent job on a mountain home with the right plans.  Some are better quality than others, and there are some I would only recommend on certain projects, depending on an owner’s desired quality, style, type of construction, scope and budget.  I would also only recommend certain ones for building at Schweitzer Ski Resort, with it’s more rugged climate.

If you want more information on these contractors, or want to know who might be a good fit for your project, please feel free to contact me.  I am including their contact information and any websites if you would rather contact them directly.

Baker Construction (208) 263-9550

R.W. Bianco Construction (208) 263-5794

Dan Fogerty Custom Builder (208) 263-5546

Henry & Sons (208) 263-5778

Hope Builders (208) 264-5125

Legacy Construction (208) 266-1622

McMahon & Easterbrook (208) 264-6700

Mountain View Construction (208)263-1058

Pacific Construction Company (208) 264-5564

Pucci Construction (208) 263-7424

Sandpoint Builders (208) 263-7315

Frank Wakeley Construction (208) 263-0952

Western Luxury Homes (208) 290-3490

Brian Wood (208) 755-9677

Dvonne Yoder (208) 255-6696

There may be some diamonds in the rough who I’m not familiar with.  If there is a contractor out there who feels you should be included on this list, please let me know.  I would love to see projects you’ve completed and are currently working on.

John Hendricks, AIA, NCARB

Hendricks Architecture, Mountain Architects in Sandpoint, Idaho

Leave a Comment 

Good Quality Architecture Adds Value to Your Home

Building a new home or remodeling an existing one should be an exciting and rewarding process.  In most cases, hiring an Architect to help you realize your vision will add value that far exceeds their costs, in addition to simplifying the design, approval and construction process.

It is well recognized in the Real Estate community that homes designed by Architects have a value up to 50% higher than similarly sized and located homes that come from builder/ designers, draftsmen, or catalog plans. This number is much higher when compared to production homes. Since Architect fees are typically anywhere from 5% -15% of construction costs (depending on the level of service provided), any value added to a project that exceeds this fee is a direct benefit to the homeowner. An important point to remember is that value is not necessarily measured only in dollars. Value is also realized though long term enjoyment of a home with improved functionality that is designed to meet your specific needs.

An architect designed custom front entry.

If you look closely in any city or town, usually the oldest (and often the nicest) homes are almost exclusively Architect designs. The perceived value of a well designed home makes it worthy of continued maintenance and preservation, and the careful thought Architects put into their home designs tends to greatly increase their longevity. While many Builders are conscientious and build homes to last, they often choose materials & methods that make building easier and less costly, especially when they are building homes speculatively. Architects typically design homes to maximize owner value through better aesthetics, quality, livability, and longevity while trying to minimizing long term life cycle cost.

Most people can pick out a home that was designed by a good Architect, and a quick comparative study would confirm that well designed homes command significantly higher resale values. It is important to note that an Architect designed home doesn’t necessarily cost more to build. In addition, careful site consideration, efficient space planning, thoughtful construction details, energy efficiency, and creative, well informed material selections can add value that will far exceed that of a comparable builder grade home.

Aesthetic value is difficult to quantify, but most home buyers would agree that if they could afford it, they would pay more for the visual and spatial qualities an Architect can add. Homes designed by Architects also tend to be less susceptible to market fluctuations, which makes them a reliable real estate investment. Similar to other designer products, homes by well known and especially talented Architects have an “association value” that increases the price people are willing to pay for them.

Depending on where you live, there may be city, county, and state regulatory agencies that govern any building project. The process of securing approval and permitting for construction projects can be daunting, and having an Architect who is familiar with the requirements can save you valuable time, money, and help streamline the process. It is not uncommon in areas with lax building regulation for homes to be built that don’t meet code requirements, that exceed setback limits, or that are occasionally even over property lines.  Architects are required by law to design buildings that comply with all applicable building, zoning, and accessibility codes, giving you the assurance that your home meets the requirements of accepted life safety and land use standards.

An Architect can help you get the best value for your construction dollar. One of the most important decisions in the homebuilding process is locating and orienting the building on the site to optimize views, solar exposure, excavation costs, and aesthetic appeal. The long term energy savings realized by a well sited home with windows properly sized and located can be substantial. Architects stay current on the latest construction materials and technologies, and can select materials and systems that enhance your home without breaking the budget.

Quality custom home builders agree that an Architect’s careful planning, accurate drawings/ specifications and availability to answer questions while the home is being built speeds up construction time and helps avoid costly delays. This ultimately saves the homeowner money and assures they end up with a better final product. A well thought out home design can save the homeowner a lot of money by avoiding change orders, mistakes, and time wasted on the jobsite solving unforeseen conflicts. Value added during construction can also include less stress for the homeowners, more free time to devote to your family or career, and the assurance that crucial safety measures are being addressed.

Most Architects have a carefully selected group of builders they recommend, builders who have a proven record of quality work delivered on time at a fair price. An Architect can help you select a reputable builder who understands your goals and expectations. As an advocate for you, an Architect will assist you in negotiating with the builder during the contracting process, and ensure that you have a fair contract that protects your interests.  While your home is being built the Architect can help you determine if proposed changes are fairly priced, review and approve contractor pay requests, make regular visits to the site to monitor progress, and make sure it is built according to the plans & specifications.

Though some clients choose to not involve the Architect during the construction phase to save money, they fail to realize the value of having an important advocate and advisor working for them to insure that the final product meets their expectations and is delivered at a fair price. Construction projects can be challenging, and while an Architect may not be able to eliminate all of the issues involved, they can streamline the process to minimize headaches and additional costs for the homeowner.

The design aesthetic is perhaps the most obvious area where an Architect adds value to your home. A good design always creates enduring value in excess of cost, and a bad design is often painfully obvious and will be regretted far longer than the savings are enjoyed. An Architect will help you create a visually appealing home with character and style that is designed specifically for you, not an imaginary generic buyer.

It is not difficult to understand how your appreciation of a well designed home will be equally valued by a discriminating buyer in the future. Ultimately, the resale value of your home is going to be increased when an Architect is utilized to add tasteful design, improved functionality, thoughtful detailing, and quality construction that will last for generations.

John Hendricks, AIA Architect, NCARB

Tom Russell, Project Manager, LEED AP

Hendricks Architecture, Architects in Sandpoint, Idaho

A Log Accent Mountain Home, one of many different types of  Mountain Home Architecture.

5 Comments 

How the Stimulus Package Helps Construction

While it is debatable how much the new stimulus package will help the U.S. economy in the short term, there are areas of the bill that will help the construction industry. The American Institute of Architects believes that the bill will create or save as many as 14,000 architect jobs over the next two years, according to AIA President Marvin Malecha.

A whopping $29 billion will be allocated to modernizing roads and bridges, which will help many contractors in those fields, in addition to $18 billion for clean water, flood control and environmental restorations.  Also $5 billion will be used to upgrade Defense Department facilities, including housing for troops.

Energy efficiency is another huge part of the bill, with $20 billion allocated. Homeowners who add energy efficient windows, furnaces, heat pumps and air conditioners can get a tax credit to cover 30 percent of the costs, up to a total of $1,500. The credit can also be used by home owners to replace windows or upgrade their insulation. About $300 million will also be given out when buying efficient appliances. Another $5 billion dollars will help low-income home owners make energy improvements. This will greatly help many suppliers and contractors who are involved in these types of work, not to mention homeowner’s future energy bills.

There are also tax breaks for people wanting to install solar panels or wind turbines to power their homes.

About $8 billion will go towards the modernization and renovation of schools and colleges.

Environmental projects at the Interior Department and the Environmental Protection Agency will be given $9.2 billion. This will include building energy efficient visitor centers at national parks and wildlife refuges.

Billions will go towards mass transit. Stations will need to be designed and built. I believe there also might be something in there in regards to building green affordable housing, which of course also benefits architects and contractors.

The National Council of Architectural Registration Board has also listed the following facilities to be built:

* General Services Administration (GSA), energy-efficiency upgrades for federal buildings: $4.5 billion

* Facilities on federal and tribal lands: $3 billion

* National Institutes of Health, facilities upgrades/construction: $1.5 billion

* National Science Foundation, research equipment and facilities upgrades/construction: $600 million

* Department of Homeland Security, new headquarters: $450 million

* National Oceanic and Atmospheric Administration, procurement, acquisition, and facilities construction: $430 million

* Department of Homeland Security, ports of entry: $420 million

* National Institute of Standards and Technology, facilities construction: $360 million

* Department of Agriculture, facilities: $330 million

* Border stations and ports of entry: $300 million

* U.S. Courthouses and other GSA buildings: $300 million

* Fire stations: $210 million

* State Department, Capital Investment Fund: $90 million

* Smithsonian facilities: $25 million

There are parts of the bill that could help individuals and their families, such as:

* A refundable tax credit of up to $400 per worker ($800 per couple filing jointly)

* An expansion of the child tax credit, from two to three children

* Extended unemployment benefits through December of 2009

How does the stimulus bill affect our business?

We specialize in luxury mountain homes, although we do just about everything from Tuscan style to beach house style, from small residential additions to large recreational buildings. Most of our clients historically have been in the private sector and in the higher income classes, and the stimulus package is not geared to specifically help the upper classes. However, while the energy efficient options are always specified by us, the tax credits and rebates could be added incentive for home owners to build, on top of more competitive contractors, and cheaper supplies and shipping costs.

We have always designed everything to meet current codes, and we recommend that home owners go beyond those to save on future energy costs. For example, instead of using an R-38 insulation value at the roof, an R-54 will insulate the house even better, and will save on long term costs. In older homes, the combination of lower insulated walls, single pane windows, and air gaps causes so much fluctuation in temperatures that furnaces are constantly turning on and off in the winter.

As I mentioned, there are a lot of great deals out there already, and these extra incentives could be all some people need to get going. Many architecture firms can’t count on two hands the number of projects and potential projects that are on hold. Some of these projects are starting to come back to life, mostly from people wanting to take advantage of all of the deals. This trickle could turn into a stream of projects flooding architect’s offices within the next year.  In addition, architects designing government buildings could make out very well with this stimulus package.

I believe that banks lending money again will have the biggest affect for us personally, as many of our clients use loan money to fund their projects.  The new stimulus package certainly does not have what most of the construction industry was looking for, but in this economy we should take whatever we can get. Hopefully this can all be part of the light at the end of the tunnel for everybody.

John Hendricks, AIA Architect, NCARB

Hendricks Architecture

For more information, please see this link from the AIA.

2 Comments 

John Hendricks, AIA Architect • Architecture, Planning, Construction Management
418 Pine St, Sandpoint, Idaho 83864 • T 208.265.4001 F 208-265-4009 • john@hendricksarch.com