Bid Draws
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Re: Bid Draws
my opion would be to get the prints from the owner of the body sbop though his engineer or architact.If not then do the bid to NEC, and to other specs the owner might have. I would be sure that you get the same specs of the others bidding and put it all in a contract so if somthing is left out it won't cost you.
my opion would be to get the prints from the owner of the body sbop though his engineer or architact.If not then do the bid to NEC, and to other specs the owner might have. I would be sure that you get the same specs of the others bidding and put it all in a contract so if somthing is left out it won't cost you.
william runkle
Senior Member
- Location
- Michigan
Re: Bid Draws
It all depends upon how much is the bid if low which I don't think it would be 50-50 Half at commencement and Half at final. If it is large then 40% at commencement and 40% at rough inspection and 20% at Final Inspection okay and use the second draw as assurance to be paid prior to inspection no money no inspection and all work is stopped, sounds mean but that way you can use their money and you will not be banking them.
It all depends upon how much is the bid if low which I don't think it would be 50-50 Half at commencement and Half at final. If it is large then 40% at commencement and 40% at rough inspection and 20% at Final Inspection okay and use the second draw as assurance to be paid prior to inspection no money no inspection and all work is stopped, sounds mean but that way you can use their money and you will not be banking them.
Re: Bid Draws
That's pretty generous of you...you are essentially loaning 50% of the money to the customer FREE of charge to them, and possible end up losing that money.
I would accept no less than 40% before work starts...maybe 25% at signing, another 15% when they are ready to start (40%);
I would take no less than 30% PRIOR to a rough/turn on inspection(30%);
I would accept no less than 20% PRIOR to a final inspection(20%).
I would accept the final payment of no MORE than 10% after completion(10%).
You spread the payments out in direct proportion to your progress...which may make it easier for the customer to make the payment (or least hang onto some and make some interest putting it into 30 day CDs).
Why on earth would you willing put 50% of your money at risk? Having the 10% cap on final payment limits YOUR risk.
Have you even considered the inevitable changes and extras? How will that be addressed...hopefully NOT at/after completion.
That's pretty generous of you...you are essentially loaning 50% of the money to the customer FREE of charge to them, and possible end up losing that money.
I would accept no less than 40% before work starts...maybe 25% at signing, another 15% when they are ready to start (40%);
I would take no less than 30% PRIOR to a rough/turn on inspection(30%);
I would accept no less than 20% PRIOR to a final inspection(20%).
I would accept the final payment of no MORE than 10% after completion(10%).
You spread the payments out in direct proportion to your progress...which may make it easier for the customer to make the payment (or least hang onto some and make some interest putting it into 30 day CDs).
Why on earth would you willing put 50% of your money at risk? Having the 10% cap on final payment limits YOUR risk.
Have you even considered the inevitable changes and extras? How will that be addressed...hopefully NOT at/after completion.
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
Re: Bid Draws
The terms you advocate would indicate you do not have the financial stability to perform this work. It also transfers all financial risk to the customer. If I were a customer and you presented those terms, you better be about 20%-25% lower than the competition and have impeccable references. Personally, I don't want to work at a 20% discount.
[ May 20, 2005, 08:49 AM: Message edited by: hardworkingstiff ]
You would never be able to work for my customers. And oh by the way, I often make 40% gross profit. How would you feel if your supplier asked you to pay for 50% of the material cost before they ordered the material?
The terms you advocate would indicate you do not have the financial stability to perform this work. It also transfers all financial risk to the customer. If I were a customer and you presented those terms, you better be about 20%-25% lower than the competition and have impeccable references. Personally, I don't want to work at a 20% discount.
[ May 20, 2005, 08:49 AM: Message edited by: hardworkingstiff ]
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
Re: Bid Draws
There is nothing wrong in asking for credit references (and CALL THEM!). If someone cannot present three credit references, you don't want to work for them anyway.
Good luck.
If there is a big ticket item, I put in my proposal that it needs to be paid for upon delivery to the site (sometimes upon delivery to the suppliers warehouse). I don't usually ask for a deposit, but do expect prompt payment on invoices presented. I invoice upon milestone completions (rough in). I make sure to spell out the terms in the proposal, and a discussion of this is appropriate (prior to signing).
There is nothing wrong in asking for credit references (and CALL THEM!). If someone cannot present three credit references, you don't want to work for them anyway.
Good luck.
Re: Bid Draws
Last I looked, I was a licensed EC, not a banking institution - the customers financial stability (or instability) remains theirs and theirs alone.
Every trade I have ever hired to do a job in excess of 2k, ALWAYS asks for a deposit....being an EC differs how?
You may view this as an indication of financial instability, but the reality is it is an indication of being "burnt" one time too many.
Last I looked, I was a licensed EC, not a banking institution - the customers financial stability (or instability) remains theirs and theirs alone.
IMO, that is seldom a good idea - why would you want ALL the risk?
Every trade I have ever hired to do a job in excess of 2k, ALWAYS asks for a deposit....being an EC differs how?
Personally, I think you're pretty arrogant and a bit out of line.
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
Re: Bid Draws
QUOTE]Personally, I think you're pretty arrogant and a bit out of line. [/QB][/QUOTE]
That's not the 1st time I've heard that, probably won't be the last. I am sorry and apologize for hurting your feelings.
QUOTE]Personally, I think you're pretty arrogant and a bit out of line. [/QB][/QUOTE]
That's not the 1st time I've heard that, probably won't be the last. I am sorry and apologize for hurting your feelings.
dduffee260
Senior Member
- Location
- Texas
Re: Bid Draws
We never get any money up front on large draws. The schedule of values shows a breakdown, then we send in pay request on work performed or materials stores on site. Alot of times this is on government, state and other jobs of that nature. It seems like everytime a contractor gets money up front they skip out on the work. I would never pay anyone for work before it was performed, I would pay for the materials after they landed on site. We do have some troubles at times in collections, we sometimes have to lein property but that is something that just goes with the territory. Although at times I try pad certain items on a project so we can get a little ahead in a sort of way. Best of luck !
We never get any money up front on large draws. The schedule of values shows a breakdown, then we send in pay request on work performed or materials stores on site. Alot of times this is on government, state and other jobs of that nature. It seems like everytime a contractor gets money up front they skip out on the work. I would never pay anyone for work before it was performed, I would pay for the materials after they landed on site. We do have some troubles at times in collections, we sometimes have to lein property but that is something that just goes with the territory. Although at times I try pad certain items on a project so we can get a little ahead in a sort of way. Best of luck !
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
Re: Bid Draws
I've heard it called "front loading", and just about everyone does it. By the time you get paid and have retainage held back, I think it keeps you about on par with job progress.
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