My wife and I have an interior design firm and are bidding the design work on a commercial construction project, (a boutique hotel). We have done jobs for homeowners in excess of a million+ but never a commercial job of this nature. Estimating the purely ‘decorative’ items (furniture, linens, floor coverings etc) is relatively straight forward. But on a project such as this there are areas that overlap. She might specify a certain type of window casing or baseboard for example; in the bathrooms she will be responsible for choosing the tile, the sinks, vanities and the visible plumbing fixtures. We would then hand the specifications off to the GC who would install them. Would the GC then buy these types of materials, since he will be responsible for installing them, or should we? I am thinking the GC will want to make the mark-up on these items and will want to buy them; she is not certain. What is the typical markup in this kind of situation (assuming a GC buys them)? Are there any other costs that might be shared between the GC and the interior designer? We want to submit as accurate a proposal as possible and to do that we need to factor in as much of our costs as possible.
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Thanks for the help.
Replies
I am a project manager for a bank, and I build new branches. We (the bank and the archy) specify certain products by name, sucvh as carpet, ceramic tile and grout, certain decorative light fixtures, etc. We also specify paint colors by brand and part number. The GC is responsible for finding a supplier and obtaining the items. For the carpet, we have a custom brand and color, and a national purchasing agreement ... the gc orders the carpet and pays our price ... he makes a profit on the installation and overhead. We used to have a custom laminate for the teller counters. You could only order it if you told the vendor the secret password ... otherwise they would deny that it existed. (We have since gone to a standard color.)
We also supply certain items that the gc either has to install, or at least coordinate with out vendor. This includes all the bank equipment (safes, pneumatic tube systems, etc) the furniture, alarm system, etc. For that he makes a profit on the supervision and overhead.
So to answer your question, you should specify the importasnt items and let the gc provide and install them. The only time you would want to provide it and have the gc install, would be for some funky fabric or something that is only sold to a decorator. But try to avoid that. make your money on your design fee, and leave everythign else to the contractor.
"Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
In the same situation I would want our company to purchase the specified items.
The reason has little to do with mark-up though. I would want the control over the process making it our responsibility to ensure the quantity was enough and the delivery was when we needed it. If something went wrong I would then have control over making things right.
Now if it were a few light fixtures, or window coverings, etc. it wouldn't be a big deal, but a whole building of light fixtures or window coverings it would go through suppliers I have a relationship with and can count on.
I have worked on a few commercial projects with an only an interior designer and many, many without one that I was directly involved with. The typical procedure is that on a project that is a substantial remodel or new construction the GC works through the AE, the designer works with the AE and there is little or no direct contact between the two. There can be items supplied by others and installed by the GC or his subs or separate owner hired contractors, generally speaking GC's myself included dont like this, as it often screws up the flow of the project and creates arguments regarding quantities and timing of materials needed. On projects where there is no AE and these are typically face lift projects, the interior designer works with the owner to pick a GC or series of subs or hires his own installers. In this case the designer usually supplies the materials which, no offense, are generally marked up far more than those a GC supplies even being the same exact items. I believe interior designers operate on markups that are more typically found in retail operations, these types of markups are not typically available to GC's. Material markups vary but generally are between 10 and 20%
I see this in residential work frequently - both the GC and the ID want to purchase the material and get the mark up. These discussions can get pretty heated.
I'm always in favor of the GC purchasing the material. This puts in his lap the responsibility for quantities, ordering and scheduling. It also means that if there is a problem with the installed product (either an installation defect or material defect), as long as it is within the warranty period, the GC owns it.
If the ID doesn't get the material in time, or not enough material, the Owner is on the hook for delay of schedule. If there is a problem with the material, the ID may (or may not) have a responsibility to replace the material, but this may or may not include removal and installation - if not, then the GC gets involved anyway.
If I was the G.C. dealing with interior decorator supplied product it would get marked up anyway. I would actually mark the product up higher than normal to deal with all the issues that interior decorators bring to the job. All the commercial tenant fit outs I have done have been under the AIA201 contract. There is no legal relationship with an interior decorator, they would be represented by the owner. It is also a fixed price contract so no one really knows for sure what your markup is, except the declared markup for change orders.
My best advice for the original poste is design the project. Create detailed specifications for every product you need installed in the project. Have the owner get the architect to include these spec.s in the project manual. Charge the owner the cost you want for the project as a fixed fee. Stay out of the project until it is done or atleast direct your communications with the project owner who can then communicate with the contractor.
I have worked with quite a few interior decorators on both commercial and residential projects. The ones that don't have good plans and drawings (good is defined as adequate to reproduce what you were envisioning with out extra explanation) try to stay on site and design on the fly. This ends up being a big hassle and costs everyone extra time and money because of poor planning.
Good Luck
Jason
The AIA contracts have provisions for a contrasctural relationship between the architect/designer and the contractor, but it has to be specified that way. Sometimes the owner/customer does not want to be in the loop. And there are also provisions for other than fixed price contracts. But otherwise you're right."Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
I know what you're talking about, I've worked on jobs where the decorator treats the project like a design lab and expects everyone to help out trying this tile pattern or hardwodd floor detail like 8 million ways. It's hard to remain a calm collected professional in a situation like that.
Thanks to all who responded. I see there is a range of responses from 'own it all' to 'let the GC do it all'. In fact, his particular client wants more input from the designer than most in our experience (hence my question) because of his previous experience with the architect and GC on the last project. From our perspective, we really don't want to be involved ordering items we are not installing, such as sinks, faucets, shower and tub fixtures etc. We feel it imposes liabilities that we, not being plumbers, tile layers etc, are ill-equipped to handle, and would therefore like the GC to take on ordering those types of items. This particular client, however, very much wants the the designer to spec out all the fixtures, the tile (and layout) flooring material, countertops, vanities etc., to achieve a specific look. Based on the feedback here, the client's wishes and my gut feeling, I think we will draw the line at the installation. Whoever is responsible for the installation of the item in question, orders it, buys it and is responsible for ensuring it is delivered on time and meets all the requirements and codes. We will handle our (small) part of it and charge a design fee for the rest. At least that is what we will bid.
Again, thanks for all the feedback.
This particular client, however, very much wants the the designer to spec out all the fixtures,
Nothing wrong with that. But once it's spec'd the designer needs to hand it over to the contractor. One thing that is standard in commercial construction, and probably unusual in residential, is that the contractor and subs are required to submit cut sheet for all items before they are ordered. The architect verifies that they are ordering the correct product, and signs off on it."Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt