CONTRACTORS, BIDS, CONTRACTS

The decision of who will build a house is an important one. Price, references and compatibility all need to be considered. When embarking on one of the most expensive purchases of your life, often taking nearly a year to complete, working with a contractor you like, can deal with easily and trust is a major aspect of deciding who you will choose. A contractor may be preselected, chosen by bidding or negotiated. In residential work, most, but not all contractors are men.

In some cases, a contractor is preselected. A contractor may have been chosen even before a design is begun. He may have been known prior to the project or worked with the client before. He may come so highly recommended that no one else is even considered for the job. Sometimes, a contractor is involved even before an architect is selected or a design begun.

A contractor can be selected through a competitive bidding process. Contractors are invited to bid (usually 3, less and no one knows who is correct when a difference arises, more and it seems just like price shopping. Good builders may simply drop out. There is a lot of gossip amongst sub's and suppliers.) Those chosen to bid have already been reviewed to some degree, but clients still check references and visit each contractor's earlier projects. A face to face meeting is important to determine if the contractor and client are compatible. The client decides on some combination of price, references and compatibility. The job is not always awarded based just on price. A client may be willing to spend more on one contractor based on previous history and experience. Each bidder is given multiple sets of plans, a CD of the drawings and about 1 month to bid.

In a negotiated bid, a contractor (or several) price the house and negotiate with the client on the terms. Fees, scheduling, methods and any other factor may be up for negotiation. Negotiation may be combined with the other methods of selecting a contractor.

One area that needs to be considered, is under what terms the home will be built. Some form of contract will be agreed upon. A contract may or may not be reviewed by a lawyer. If there is to be a construction loan, the lender has some say in how the contract is written and in who builds the house. It is common to build homes using cost plus, fixed fee and combinations of these types of contracts. Many clients ask that specific sub-contractors or suppliers be used, inserting them into the contract.

Allowances may be used in a contract. The architect may set allowances. No one knows exactly what carpet or tile or light fixture will be chosen, so a price is inserted into the contract as an allowance, knowing it is likely to change. This allowance should be reasonable and realistic. The contractor will base some of his fee on the allowances. If an allowance is too low, the contractor is not fairly rewarded. If too high, the client is overcharged.

In any type of contract, there will be many smaller bids on labor and materials making up the larger, overall bid. Some comparisons should be made between bids or other similar custom homes as a way to find errors and discrepancies. It is best to spell out how a home will be built, but without attempting to account for every nail. When a home is built to the satisfaction of both the contractor and the client, everyone will be happy.

PROGRAMING

The first step in the design of a custom home is the writing of a program. An architectural program is a written description of the proposed house. In residential construction, general concepts, the look and style of the house, the views desired, the materials wanted; all go into the program. A list of spaces with their requirements is made. Sizes and square footage are estimated and a rough cost estimate is made using a current dollars per square foot cost figure.

A general description of the proposed house might include comments on the site. How many acres is the property? Are there views? Are there rocks, trees and shrubs? How is access gained? Utilities and services should be considered. What is the look or style desired? What materials are favored? Is the house to be energy conserving or solar?

When describing a space, all details are included. In a kitchen, all the appliances that are wanted are listed, the general look, the lighting, cabinet types, what kind of counter tops are desired, an island versus a peninsula and the kitchen's relationship to other spaces are all noted. In a great room, is there to be a fireplace? A TV? What kind of furniture? If a fireplace is desired, where is the house located? Some locations require a gas fireplace instead of wood (to reduce pollution). What does the client want? Are there enough trees on the property to provide a wood source?

Next, the architect notes all spaces with their rough sizes and square footages. Sizes are estimated off what is desired, what is required, the budget, comments from the clients and the architect's experience. Listing a bedroom as 8'x6', just to make the total square footage and final budget look good is very poor planning and programming.

Now the square footage of all proposed spaces is added up. I factor in a % for circulation and wall thickness (20% to 25% typically). A total of the proposed finished square footage is arrived at. From here, what's done next varies amongst practitioners. Basically, the finished square footage is multiplied times a dollar per square foot cost estimate. But, walkout space costs less than main floor or upper floor space and simple plans cost less than complex ones.

My method assumes a garage in proportion to the size of the house. A small house is assumed to have a 2 car garage and no square footage is added to reflect this garage. If a small house client desires a 3 car garage, the dollars per square feet must be higher or some sum of money must be added to cover the cost of the larger garage. Walkout space (basements), costs less, so I use a lower dollars per square foot cost (often 50% of the main floor cost). Then the main floor and upper floor area is multiplied times the full dollar per square foot cost. Finally, all these costs, plus the costs of any special, extra features (an elevator is a good example) are added, giving a rough estimate of the expected construction cost.

A good program then goes through a series of revisions. If the proposed budget is too high, the overall size is reduced or some spaces eliminated or rearranged. If something needs to be added, it is (a wet bar or a 1/2 bath is typical). These revisions are continued until a final program is agreed upon. This written program is then used as the basis for designing the home.