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#20469 - 01/14/03 03:13 PM So far...so good - need more input
Happi_Man Offline
Member

Registered: 06/12/02
Posts: 213
Loc: Columbus, Ohio - USA
Okay - My first commercial bid is coming together.

I am going to put togehter the scope and whatnot tonight. I'm curious how you work out a payment schedule. On residential stuff we require 60% at the rough-in and the remainder on the finish - should I stick to that methodology with a commerical job?

I guess I am so nervous because we are working with substantially higher numbers...I'll get used to it though...hehe

by the way - thanks for all the input so far everyone...

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#20470 - 01/14/03 03:50 PM Re: So far...so good - need more input
HotLine1 Offline

Member

Registered: 04/03/02
Posts: 6804
Loc: Brick, NJ USA
Happy:
If the job is under an AIA contract format, you have to abide by the format. ie: progress payments based on work completed and/or materials "on site" or on order & "pre-paid"; LESS THE RETAINAGE AMOUNT (ususlly 10% of amount requested)

WE usually ask for "progress payments"; based on work completed, either bi-weekly or minthly, depending on the size of the job.

"Deposits" are sometimes negotiated, again, depending on the job.

Small comm, we usually ask for 50% rough; 40 finish; 10% retainage for punch list & misc.; usually 30 days.

Usually the "final" payment hinges on a CO or TCO approval.

Any "Change Orders" or "Additional Work Requested/Approved" items are invoiced as additional progress, or "in full" if completed. Except if it's AIA, then that amount is added to the contract total.

Hope this helps.
John
_________________________
John

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#20471 - 01/14/03 04:06 PM Re: So far...so good - need more input
sparky Offline
Member

Registered: 10/18/00
Posts: 5545
i like the 'progress payment' idea John

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#20472 - 01/14/03 05:17 PM Re: So far...so good - need more input
Happi_Man Offline
Member

Registered: 06/12/02
Posts: 213
Loc: Columbus, Ohio - USA
Okay - here's one - what do you consider small commercial?

We're at just over 60K - its a 4000 sq ft retail store in a ritzy shopping area (Les Wexner - owner of The Limited - owns this place and its like a small town).

Is the payment schedule something I should plan on negotiating if I win the contract?

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#20473 - 01/14/03 05:38 PM Re: So far...so good - need more input
HotLine1 Offline

Member

Registered: 04/03/02
Posts: 6804
Loc: Brick, NJ USA
Happy:
At 60k, you should be able to negotiate the payment terms, but you have to mention it in the proposal.

"Payment Schedule to be Negotiated by this contractor and (principal/owner/gc)"

Our last job:
Bi weekly progress payments of around 17K
for 8 wks and a final of 19.5K, net 20 days.

Current "sizeable job" is T&M, bill at end of month; check by 10th of month or sooner.

BTW, "Small commercial" can range from $1500 to 40K; "Largest" we landed was $279K proposal with added 95K service upgrade and 20+K in "Extras"

Hope this helps
John
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#20474 - 01/14/03 05:51 PM Re: So far...so good - need more input
Electric Eagle Offline
Member

Registered: 04/20/02
Posts: 928
Loc: Alpharetta, GA
A note on retainage:

Most large projects are going to insist on a 10% retainer. Do not plan on this amount as part of your profit. Consider it an expense. Some contractors plan to never let you get this last payment and will find problems with your work until you give up. In general, you'll either never get the retainage or you'll have to pay that much or more in additional labor to get it. I'm not trying to scare you, just help you see what it took some of us a hard lesson to learn. Also, make sure you know what the contract says and jump through the right hoops to preserve your rights. I had a contractor go out of business(bounced progress check) during a large project and found that my contract required us to work 2 weeks after we gave written notice of the breach of contract. Can you guess how much we got done during that 2 weeks, it was spent getting our equipment off site.

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#20475 - 01/14/03 06:12 PM Re: So far...so good - need more input
HotLine1 Offline

Member

Registered: 04/03/02
Posts: 6804
Loc: Brick, NJ USA
Eagle:
I know what you mean about getting burned. Had a GC go belly up with about 35K hanging "open"...
After the dust settled, and his bankruptcy case settled, we got 2k and that was it.

We haven't (knock on wood) had a problem with the retainage end as of today. Luckly, I found "a few good men" to work for.

Good Luck Happi, hope ya get it.
John
_________________________
John

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#20476 - 01/14/03 06:17 PM Re: So far...so good - need more input
Happi_Man Offline
Member

Registered: 06/12/02
Posts: 213
Loc: Columbus, Ohio - USA
Gotcha. Definitely helps.
Have you got any pointers as to anything I should absolutely not leave out of my proposal?

So far I have:
work will be performed as interpreted from plans, blah blah blah, UL, balh blah, applicable permits, codes, etc blah blah NEC 2002, blah blah.

Work will be completed according to reasonable schedule, balh blah if no writeen schedule then blah blah.

additional work will be billed this way and that upon receipt of written work order/change order

payment schedule shall be negotiated blah blah...

================
btw - this is a pretty reputable GC (I think DF Pray). I will let you know if we have any luck. Got another bid going in next week on a Nextel Store. It can only get easier right? Thanks again guys

[This message has been edited by Happi_Man (edited 01-14-2003).]

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