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Fee for a bid?

  • 1.  Fee for a bid?

    Posted 02-15-2018 08:47 AM

    I recently reached out to a new contractor to add to a bid list of 3 for a residential addition, roughly a $300K project.  He indicated that he would look at it but that he charges a fee to submit a bid usually in the range of $1500 - $5000 depending on the size of the project.  I was very surprised to hear this.  In 25 years of practicing architecture, I have never been asked to pay a fee for a bid.  I understand that it takes time to submit a bid, just as it does for me to meet with a client to discuss potential work and then write and submit a proposal, but to me it is a necessary marketing cost. 

     

    Has anyone else experienced this?  Do you think it is a fair ask?  Thanks.

     

    Stephanie Sola-Solé, Architect

    Sola-Solé ARCHITECTS

     

    Direct: 202.744.3251

    Website: www.solasolearch.com

    Email:  stephanie@solasolearch.com

     

     



  • 2.  RE: Fee for a bid?

    Posted 02-16-2018 05:29 PM
    ​Hi Stephanie,
    This is somewhat common in the Pacific Northwest. Everyone is very busy and don't have a lot of free time.  It is not the same as a potential new client interview for an architect -- a bid can take 40 hours!  That's a lot of time for marketing.  However, many good contractors can give a ball-park number within about 10-20% and don't charge for those kind of numbers.
    Good luck!
    Buzz Tenenbom

    ------------------------------
    Buzz Tenenbom A!A
    Seattle, WA
    ------------------------------



  • 3.  RE: Fee for a bid?

    Posted 02-19-2018 05:58 PM
    We have a DesignBuild firm in San Francisco, we do architecture, DesignBuild projects and recently we have been going after some construction only jobs.  As one person commented, it can easily take 40+ hours to prepare a thorough estimate for a $500K remodeling job.  We analyze each opportunity and decide if we want to competitively bid, at our expense, or if we think it is appropriate to have a "Pre-construction" agreement where we get reimbursed for some, or all of our time.  

    Some considerations:
    - If we are competitively bidding, how many other contractors are bidding?  More than three, we are typically not interested, a 1 in 4 or 1 in 5 chance is not good enough.  

    -Are the drawings a true "Bid Set" with specs so we are not left guessing?  If not, then we will not bid, without a pre-con agreement.

    - If we are asked to prepare early pricing we see this as a service, to help the architect and owner fine tune project scope and budget, so we charges for this time.

    - If we are already busy, as is everyone in my market these days, we are less inclined to offer free pricing.  

    - We are more inclined to competitively bid commercial work, it is usually a more even playing field.

    - We very often set up the pre-con agreement to credit back 25-75% of our time billed if we are ultimately hired to build.  The percentage credited back is dependent on the job size, risk, our desire to get the job etc.  

    - Most residential work is best not competitively bid, but negotiated after an interview process.  Bid jobs are best left to the commercial and institutional sectors

    More and more I think of construction as a service, just like architecture.  What part of the design job are you as the architect willing to provide 30-100 hours of "Free Service" to the client.  Is this not what you are expecting the contractor to do?    Are you willing to compete for a new project with 2-3 other architects, providing a week of design at your expense, to land a job?  If not, why do you expect the contractor to do this?  To just say "it's typical, it's part of their overhead" does not really cut it anymore.  Most architects I know would be offended if they were asked to do a mini-competion to get a job, particularly a run-of-the-mill $500L-$1M residential project.

    Just my two cents, with experience from both sides of the fence.

    ------------------------------
    James Zack, AIA
    Architect / Principal
    Zack/de Vito Architecture + Construction
    San Francisco CA
    ------------------------------



  • 4.  RE: Fee for a bid?

    Posted 02-16-2018 05:45 PM
    Good grief! He must have lots more work than he needs. I would say "thank you very much" and pass on him.
    Judith

    Bressack & Wasserman Architects
    751 Southampton Drive
    Palo Alto CA 94303 
    ph: 650 321-2871  
    fx:  650 321-1987 
    www.bressackandwasserman.com







  • 5.  RE: Fee for a bid?

    Posted 02-16-2018 05:52 PM

    This situation illustrates the importance of building and retaining long-term relationships with general contractors.  They come to understand that they are vetted, and applied to bid projects that their skills and experience provide a good fit.  They learn that they will have a reasonable chance of winning the bid (Though not always), and will be willing to do so without cost to you or the client.

     

    This is a relationship to be respected.  Clients should be made to understand that a project bid represents a significant and speculative time investment by contractors.  It's a reason to avoid excessive numbers of bidders on projects of this kind of scope.  Just because clients have choices of dozens of TVs or dishwashers doesn't mean they should approach selection of a GC in the same manner.  We carefully select appropriate bidders, and begin to establish the trusting relationship that makes for successful projects and happy clients.

     

    Rob Sanders AIA

    Rob Sanders Architects LLC

    436 Danbury Road

    P O Box 132

    Wilton,  CT  06897

    t: 203.761.0144

    f: 203.761.0073

    rsanders@rsarchct.com

    www.robsandersarchitects.com

     






  • 6.  RE: Fee for a bid?

    Posted 02-16-2018 06:10 PM
    So far none of the contractors I recommend would charge my client for their bid. But, I see the day will come soon when they do.

    On the architect side, I've been charging potential clients for an initial consultation for the last 2 years. I do this before they can receive a proposal from me. I have found that by charging for an initial consultation and giving them a meeting that's full of valuable information, I get clients that respect the work I do for them and don't complain about paying bills later. In other words, people who value your time and advice you provide to them from the very first meeting make for better clients.

    Jennifer Kretschmer, AIA
    Principal Architect
    J. Kretschmer Art & Architecture
    408.221.0771
    www.jkretschmer.com







  • 7.  RE: Fee for a bid?

    Posted 02-16-2018 06:58 PM
    If the project were not out to bid and you were asking a contractor to help with a preliminary budget then yes, I would expect to pay for that service.  But, the project is out to bid.  This is part of the contractor's job.  He needs to do the work to get the work.  His request tells me that he's too busy and doesn't want the work.  When the building industry slows down next time he will change his tune.  But unfortunately he will have burned opportunities to form new working relationships.  His loss.

    Carol Riewe
    Architect AIA
    Santa Cruz,  CA





  • 8.  RE: Fee for a bid?

    Posted 02-16-2018 10:56 PM
    Hi, Folks ---

    The recent post by Stephanie Sola-Sole caught my eye.  While her main point was a G.C. who wanted a fee for a bid, her closing line about the work of preparing proposals (apparently "free") is what I'd like to address.

    Long, long ago, I not only didn't charge for Proposals, I walked-'em-back to the Prospects!  After one fussy creep concluded about 7 hours of my time with, "Oh well, I was just curious.", I changed my approach.  Duuuhhhh...

    Prospects "arrive" by e-mail or a phone call, if not at my booth in the annual Home Show in March.  My follow-up is an e-mail with a detailed "Prep-list" for them to prepare for our on-site Initial Meeting.  There is an "Initial Consultation Fee" for that meeting, to be "credited to my Retainer" if we go ahead with the project.  Most folks have agreed that that's a very reasonable approach.

    Back in '07, the ICF was at $300.00.  It's now finally back-up, so far, to $200.00.  If they balk at that, then we're done.  A "free Proposal" is, very often, simply not appreciated.

    Good luck, Folks ---
    Bill
    william j. devlin aia, inc.,
    ARCHITECT
    Springfield, MA





  • 9.  RE: Fee for a bid?

    Posted 02-17-2018 10:19 AM
    Nope, it should be part of his overhead. Tell him sure but you need a $1500 deposit on the bid set of plans.

    Thad Broom, AIA

    ------------------------------
    Thad Broom AIA
    Architect
    Thad A. Broom AIA, P.C.
    Virginia Beach VA
    ------------------------------



  • 10.  RE: Fee for a bid?

    Posted 02-19-2018 06:02 PM
    After opening my own practice it took me, like Bill Devlin, a while to realize that there were a lot of people out there looking for free advice and ideas.  After that "aha!" moment I offered prospective clients a free meet-and-greet in my office to show examples of my work and discuss my fees.  

    Following that any site visits, preliminary sketching, zoning code research etc would be charged at an hourly rate to be applied as a credit to the retainer.  I found this to be an effective way to weed out prospects looking to use my expertise for free.  Sure I lost some potential clients that way but I figured that they probably were prospects that I'd rather not have.

    Luther M. Hintz, AIA Emeritus
    Seattle, Washington





  • 11.  RE: Fee for a bid?

    Posted 02-17-2018 11:11 AM
    It would be different if it was the homeowner calling around shopping. But you are giving the contractor an opportunity to submit a bid, for a good sized project, He will be one of a select few, competent contractors. He doesn't have to worry about other contractors submitting lowball bids, getting paid or Owners who are nitpicky.  He should relish the opportunity.

    Most contractors that ask for up front money prefer to work without the architect. They feel that they can better manage the project without someone else reviewing their work, and also, probably, charge more.

    Good contractors look for projects driven by relationships. The first step to building the relationship is being asked to join the list. Asking for money just got you kicked off my list.

    ------------------------------
    John A. Feick AIA
    Feick Design Group, Inc.
    Sandusky OH
    ------------------------------



  • 12.  RE: Fee for a bid?

    Posted 02-17-2018 01:03 PM
    I do mainly small Commercial the days and I cross out the Architect being in charge of the budget and the estimate.  I have the owner hire a contractor or builder to estimate the project after DD.  For this we often pay $500.  Most of the Contractors are happy to be paid an amount of money ...at all.  It isn't a bid but a quality estimate.

    ------------------------------
    Nelson B. Nave AIA
    Owner
    Nelson Breech Nave, AIA Architect
    Kalamazoo MI
    ------------------------------



  • 13.  RE: Fee for a bid?

    Posted 02-17-2018 11:25 PM
    So submit the amount or don't.

    Rudy Beuc
    R. Beuc Architects.

    ------------------------------
    Rudolph Beuc AIA, NCARB, CBO
    Architect
    R. Beuc Architects
    Saint Louis MO
    ------------------------------



  • 14.  RE: Fee for a bid?

    Posted 02-19-2018 06:17 PM
    Edited by Edward J. Shannon III AIA 02-19-2018 06:22 PM
    There are builders who competitively bid, and there are those who don't!  We are talking about residential builders here - not commercial contractors who have sophisticating bidding procedures.   I have practiced in two metro areas, Chicago and Des Moines.  In the Chicago area I could usually line up 3 to 5 bidders for a project.  However, there were some builders who would not competitively bid.  Typically, they were well established and had a steady flow of referrals.  They were not competitive and didn't need to be as they had excellent reputations.  In Des Moines there is virtually no bidding climate in the residential sector.  In my previous office, we had one project, a 2M house (very expensive for the Midwest!) in which the owner insisted on competitive bidding.  Our office worked with many residential builders in the metro, yet we could only line up two bidders!  Most of the reputable builders wouldn't touch it!  In the end we had a $300K spread between bids!  - which more than paid for our fees!  

    Residential builders are not obligated to bid.  Some choose to as part of their business model.  Some do not need to and can get work through referrals. In regard to the fee, at the extreme of $5,000, the owner would be paying $15,000 just to get bids!  At that point, they might was well just pick a builder and negotiate.  If you already have bidders you consistently use, then there is no reason to reach out to someone new.  The new builder you are referring to obviously does not need the work.  I am going to speculate that he would be the high bidder, as he probably is not very competitive.

    ------------------------------
    Edward Shannon AIA
    Des Moines IA
    ------------------------------