Hello everyone,
We plan to start the shell construction in March 2021. The building site is in Baden-Württemberg, and for the basement plus one full floor and knee wall floor, we have shortlisted two construction companies based on the received tender prices through a well-known architect.
The tender was based on a fixed price. According to acquaintances, construction companies always include a certain (risk/error) buffer of several thousand euros somewhere in their offers in case something unforeseen happens during construction, so the project doesn’t become a loss for them.
Since our second child is expected in February (parental leave), I plan to contribute a lot during the shell construction. Therefore, we are now considering moving away from a fixed price and working with one of the two companies on a time and materials basis. But which one?
Company A has a price of 214,000 EUR and Company B 227,000 EUR.
In Company A’s offer, the cost for groundwork and masonry work is almost 40,000 EUR more expensive than with Company B (materials + labor costs). On the other hand, Company B has significantly higher site setup costs and a higher hourly wage (which would probably be important for work charged by time).
What questions would you ask the two companies during your discussions to make the right decision afterward? The companies will hardly admit where exactly they have incorporated their buffer.
I’m almost thinking I might manage to negotiate a better price with Company A if I contribute well because:
a) the site setup costs are low, which are usually fixed anyway
b) the hourly wage is lower
The problem is, I don’t know how much of the nearly 40,000 EUR difference in groundwork and masonry is for materials and how much for labor rates. Hm, can you give any advice?
Which items (besides the hourly wage) would you pay attention to if you were to build on a time and materials basis instead of a fixed price?
Many thanks for your suggestions.
We plan to start the shell construction in March 2021. The building site is in Baden-Württemberg, and for the basement plus one full floor and knee wall floor, we have shortlisted two construction companies based on the received tender prices through a well-known architect.
The tender was based on a fixed price. According to acquaintances, construction companies always include a certain (risk/error) buffer of several thousand euros somewhere in their offers in case something unforeseen happens during construction, so the project doesn’t become a loss for them.
Since our second child is expected in February (parental leave), I plan to contribute a lot during the shell construction. Therefore, we are now considering moving away from a fixed price and working with one of the two companies on a time and materials basis. But which one?
Company A has a price of 214,000 EUR and Company B 227,000 EUR.
In Company A’s offer, the cost for groundwork and masonry work is almost 40,000 EUR more expensive than with Company B (materials + labor costs). On the other hand, Company B has significantly higher site setup costs and a higher hourly wage (which would probably be important for work charged by time).
What questions would you ask the two companies during your discussions to make the right decision afterward? The companies will hardly admit where exactly they have incorporated their buffer.
I’m almost thinking I might manage to negotiate a better price with Company A if I contribute well because:
a) the site setup costs are low, which are usually fixed anyway
b) the hourly wage is lower
The problem is, I don’t know how much of the nearly 40,000 EUR difference in groundwork and masonry is for materials and how much for labor rates. Hm, can you give any advice?
Which items (besides the hourly wage) would you pay attention to if you were to build on a time and materials basis instead of a fixed price?
Many thanks for your suggestions.
N
nordanney2 Jun 2020 16:50s0nyHess schrieb:
Which cost items (besides the hourly wage) would you consider if you were to build now on a time-and-materials basis instead of a fixed price?Hourly wage is always a problematic area. I would categorically rule it out for building a house myself. What do you think, how much free time do craftsmen suddenly have? It’s hardly possible to build more cheaply than by paying an hourly wage.The first question you need to ask is whether the companies will even accept you as a laborer. The next question is, does it actually bring any profit?
What exactly do you want to contribute? What are you envisioning?
I mean, I’ve done it myself before. One master craftsman, three journeymen, and three friends working as laborers. But it doesn’t just happen like that. And doing it alone is difficult.
I hired my electricians on an hourly basis. Great work, quick guys.
I always paid the installments right away, and in the end, everyone got a fifty. But you never know that in advance.
What exactly do you want to contribute? What are you envisioning?
I mean, I’ve done it myself before. One master craftsman, three journeymen, and three friends working as laborers. But it doesn’t just happen like that. And doing it alone is difficult.
I hired my electricians on an hourly basis. Great work, quick guys.
I always paid the installments right away, and in the end, everyone got a fifty. But you never know that in advance.
H
hampshire2 Jun 2020 18:05Your listed criteria are simply not enough for making a truly good decision.
Which one gives you a better gut feeling?
Are both local, or is one located farther away?
Who shows more interest in your project?
How do they respond to your requests?
Who has better local references?
Who has employees that appear more satisfied?
What is the tone of communication like?
Those who focus only on money get only what they pay for. Don’t turn it into a soulless business transaction—do you want to live in a soulless building?
Which one gives you a better gut feeling?
Are both local, or is one located farther away?
Who shows more interest in your project?
How do they respond to your requests?
Who has better local references?
Who has employees that appear more satisfied?
What is the tone of communication like?
Those who focus only on money get only what they pay for. Don’t turn it into a soulless business transaction—do you want to live in a soulless building?
Joedreck schrieb:
And the next question is, is it really profitable?
What exactly do you want to contribute? What are you envisioning? Replacing a general laborer. Assuming the construction site lasts 8 weeks. The laborer costs a flat rate of 50 EUR per hour. So I would save a five-figure amount, right?
hamsphire, yes, those are all interesting questions. Both companies are very close (less than 20 km (12 miles)). I plan to have discussions with both managers in the summer, but so far I haven’t thought of any truly revealing questions.
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