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Bidding Multi-Unit project1/24/19
I am bidding on the cabinets for a project that is 100+ units to be completed over a 2 1/2 time frame.
What type of contract do you use for this type of situation?
How do you handle pricing for down the road unforeseen material & labor costs?
I have been searching for this info on here with little success.
We have not done this but I know someone who has and they contracted for the same floor plan for a year. The builders were not to picky about how the cabinets were build so he spent time trying to cut cost without lowering the quality of his product. This was before the days were everyone was using UV interiors. He went from painting the inside of his face frame boxes to white melamine and different stuff like that to lower his cost while still charging the same amount.
Ask the developer how they want to handle escalations, someone needs to assume the risk, its either the developer or you.
If you know the phases you could price phase 1 at $100 and phase 2 at $107 and phase 3 at $112 etc.
You need to have history of material and labor escalations over time and then apply that and markup.
Or price the stuff that's 6 months to a year out and the rest as subject to material and labor escalations.
2 1/2 year time frame.
Do you have the financing or buying power to handle this size of project? Will your suppliers extend u credit ,if you go over your limit.Some thing like this you have to by units of material. Witch brings me to the next topic, do u have a fork lift and a shop to handle the product.Getting paid will be the worst. Can u finance to keep going if u have to wait 1-3 months to get paid. just my thoughts.
I agree it will take good credit to be able to do this because more than likely you are not getting paid every week. I have 5 guys in the shop including finish and on a normal week we go through about 2 units of just 3/4" UV2. If you don't have a forklift. The amount of units of plywood or melamine you will be buying will be well worth buying a good used one. We went 35 years without a lift and bought one at the same time we bought or cnc and we had no idea how much time it saves being able to unload 2 units of plywood all at once and not having the whole shop stop and unload it piece by piece.
The others are correct, funding is critical. I have done projects like this and many things change over that time line. Like fires, deaths, companies going out of business etc. You must demand good payment terms do not fund the project for them. Trust me they are not taking that kind of risk. Donít let them push it off on you.
You have to be able to guarantee multiple of the same size can be used and let them know any variations from plan on them. You cannot custom build and maintain a tight number the magic is in multiples. Builders are loosy goosy and will tell you itís your responsibility. Donít fall for this; be sure itís written in very plain language who is doing what.
Also material handling on these projects can be a deal breaker. Find out specifically where you are delivering the product to. Is it doing to a typical staging area? Are you responsible for delivering to each unit? Who is responsible once the product is delivered?
Did a similar piece of work and we did not realize the building did not have a freight elevator.
Best of luck
D. John Bishop