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Although I do a lot of designs and drawings for my remodeling work, that part of the process is usually rolled into the construction pricing.
I currently have a client who wants me to do the design, and the drawings (which we have essentially completed), then supervise the construction project without actually doing the actual construction (although I will probably do the bulk of the trim and cabinetry, but this is a separate item).
I would be the project supervisor, responsible for overseeing the construction, ordering materials, hiring (and firing) suncontractors, and basically running the job the same as if I were doing the actual construction, except that I would be supervising some subs with whom I have no prior association, and the client would be paying all of the costs directly.
So, what do I charge as a fee for this project management ? It’s basically a whole-house remodel (complete gut and re-do of the existing 1250 SF 1-story frame house, with a 600 SF second-floor addition) plus the construction of a large two-car garage. Total project is estimated to run about $175,000.
Any ideas for the basis of such a fee ? Percentage of total job cost ? I figure this project would last about 4-5 months.
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Jay- I have had this type of arrangement twice. One job I was expected to be on the job pretty much full time and the other I was able to be there only as needed. What you need to charge is dependant on which way your customer expects you to handle the job. Make sure there are no misunderstandings about this issue! It seems as if there is little or no risk for you. BUT, if he thinks he owns you full time during that period he will resent any time you spend away from the job running your business.
Also, if he is lining up subs make sure you don't get caught in the crossfire if he gets into a conflict with one of his subs or for that matter one of yours. You may find he holds back your money for leverage against a sub he feels hasn't performed, even if you know that the sub has done satisfacory work.
Sorry I can't give you a figure or
percentage- it's just that these questions(and many others)need to be answered before you decide what your fee is going to be. If you can elaborate a bit more on these conditions I could be a little more specific.
John
*Jay, John's answer is good. I only take on the arrangement you describe with clients. Usually I use subs from my stable but do frequently use client's subs if they want it that way.I use the term Construction Manager or Consultant and describe the process as Cost-Plus a Flat Fee. Been doing it for 9 years with mostly sucessful projects.Here are some points in addition to John's that I make my policy:Make sure all contracts are between the owner and trade contractor.Have a written agreement with the owner for yourself that describes what you will do (and won't do).Don't do any labor; not even broom pushing. That you need to charge extra for. In fact, Insist on a seperate agreement for by-the-hour labor to do all the stuff that no sub has responsibility for. Anything from replacing delaminated plywood after a rain to pushing a broom to protecting a tub before the drywall crew comes to stuffing insulation in spaces before they get consealed during the framing process.Make a no-warantee statement clear. Unlike a turnkey builder or remodeler, you are not waranteeing the workmanship or materials used. That's why the owners are paying directly. The owners will have to go to the sub or supplier directly to remedy problems 6 months after the job is done. This is the risk they take and you avoid in the arrangement.I charge 8 to 15% on new construction and 15 to 25% on remodeling. This a percent on the projected cost of the project. I take payment at stages during construction. Typically: foundation or demo, rough frame, roof/siding, rough utilities, drywall, finish carp., paint, complete.All work stops till I get the payment.Have a termination clause that says you or the owners can terminate your contract at any time for any reason provided you are paid to date. Good reason to break payments up in small portions.Hope this helps,Mike
*JRS,I've already established with the client that project management for this size project is not a full-time on-site deal. They have no problem with that.We have also discussed the prospect of "getting caught in the middle" with their subs. It's been made clear that I will make the decision about a sub's suitability and workmanship, which is why they're hiring me.All of these conditions, and more, will be spelled out in the contract for the supervision.These are decent, honest clients who trust me, and I trust them. The design, drawing and permit process has been very smooth. I just have never considered doing a job quite this way before, and really don't know how to charge.I want to be fair to them, and to myself.Appreciate the help.
*Helpful comments, Mike.The warrantee issue is a good one, and I will make certain that it's clear.I had planned for a payment system, just wasn't sure what I was going to base it on. Phase-based payments make sense for all concerned, I think.Stop work and termination clauses are normally in all my contracts, but will be especially important here, I think, as the only real form of leverage I might have for payment (besides mechanics liens, and I'm not quite sure if they apply to the "super".Based on your info, my project should probably fall in the $22,000 - $26,000 range. Right off the top of my head, that seems a little pricey for a 4 month project. I would certainly expect to gross more than that if I was contracting the entire project, but for project management alone, it just sounds a bit high.Am I right or wrong ?
*Jay A,20% of total cost....15% if you like the client.That is the standard.Ed. Williams
*Jay,Everyones given good and valuable advice so far.Just a couple of things in the my two cents catagory.1.) You say this won't be a full time job ,but exactly how many hours do you figure to spend on it? If it's a fifteen week project and you only spend fifteen hours a week on it...thats still 225 hours. What if the job runs long or there are substantial additions to the contract? I think a reasonable estimation of your hours worked times your time and a half hourly rate would be fair to both of you. Adding a small profit in for your business would be prudent as well.2.) These are obviously good clients that you enjoy working with and want to cultivate a long term working relationship with. Be fair to them ,but not by cutting your own throat. Charge what you are worth and they will respect that. The future work you get from them and all the downstream referals will be because of the good work or service you provide them regardless of the price they pay.3.) $18,000 to $20,000 sounds about right to me.Good Luck,Richard Max
*Lots of good advice from everyone.I appreciate your help guys.This has got to be one of the top 5 most helpful internet sites available anywhere.
*JayAll good points so far, however, you must have some sort of overhead. ie. Insurance, workers comp, office, tool dep, vehicle fuel, phone, etc. figure out what your monthly overhead is, plus what you need to make per hour, plus profit. Do the math and figure out what an hourly rate would be, put that in the contract and then keep track of all phone calls, travel time etc and submit an itemized weekly bill. This way, the client doesn't feel that you are ripping them off. The client is paying you for your knowledge and experience.
*Jay,The projects I manage usually work out to $75 - $100/ hour. My overhead costs are nil; maybe $5/hour. Though it does sound steep you do note you'd make more if you did the job lump sum.There's always a risk the client will say no when they see the numbers but it is certianly an acid test.Mike
*Hello Mike,Think real world buddy. You're either dreaming in color or you're finding rich clients on leave from the funny farm.Gabe