Help with bidding a project 2

[JStructsteel]

Got a request for design and drafting of a unique home. See attached. 5000sf, no basement, steel framing. Backside has lots of glass, so expecting alot of moment framing, etc

What are some order of magnitudes you would charge for this?

 

[phamENG]

Oooo. Fancy.

Tough to say without seeing the plan. Given that there will be lots of steel and glass, and the general appearance of the house, I'd say that it'll be a complicated, high end custom home. Quick internet search says home building prices in Georgia range from $150 to $250 per square foot, sometimes up to $300. So at $250/sf, that puts total construction cost around $1.25M. Structural fee, including a 'complexity' up charge would be in the neighborhood of $12k to $14k.

If it's not as nice as it seems or not as complicated as I suspect, or if I'm really hungry for the work (need to pay some bills, really want to work with this architect, etc.), I might go as low as $9k.

This is the fee for design, bidding RFIs (within reason), and permit comment responses. Everything after that is hourly.

(I usually run through multiple pricing scenarios - expected effort x hourly rates + contingency, % of construction cost, and $/sf - and feel it out from there. In this market, I'll just take the highest of the three and see if it sticks. I'll never go lower than expected effort + contingency.

 

[XR250]

I'd be about the same as Pham.

 

[JStructsteel]

Thanks.
It actually located in Ohio, not sure why showing up Georgia.

I was thinking 8-10K min.

 

[Brad805]

Do you know or have you worked with the Architect before? Did you get any plans or sections that suggest the ideas are well thought out and constructible? If not, the fees we would charge is much higher.

 

[JStructsteel]

Have worked with them before. So far no plans. I will go high because of this, and explain it could be revised either way once some plans are developed.

 

[EZBuilding]

You should request a list of deliverables and schedule.

If the architect is looking at submitting 3 sets of plans to the client for review across 4 months versus 2 sets of plans with you only have to take part in the final one across 2 months there is a big difference on the effort.

I applaud Pham's intent to include Construction Administration as hourly. It is very hardly to control your efforts during that phase and your involvement changes based on circumstances outside of your control.

 

[phamENG]

Thanks, EZ - I learned it the hard way.

 

[jayrod12]

I've learned the hard way on CA phase for high end homes too. I find those projects are the worst for changed during construction. And every little change seems to have a trickle down effect on these homes because the entire time during design they're crying about how much the structure is costing so you trim all the fat and leave minimal excess capacity anywhere.

 

[Aesur]

I agree with PhamEng above, however I would have a separate fixed CA phase/fee of about 10 to 15% of the design fee (lower % for higher design fee) for something such as this, however if you could get hourly CA that is always the way go to IMO.

 

[jayrod12]

I have found an hourly CA phase for residential is usually the way the owners want to go. For a properly managed project, the actual involvement of the design engineer is pretty minor in most cases. A few instances of mandatory inspections but otherwise if built as per the plan there's not usually a lot of work. However a terribly managed project, or an owner who changes their mind all the time, get accordingly "punished" for constantly calling you.

If I'm picking up Pham's vibe correctly, he almost lost his shirt on one of those projects with a fixed fee construction phase and a poorly managed/constantly changing project.

 

[phamENG]

If I'm picking up Pham's vibe correctly, he almost lost his shirt on one of those projects with a fixed fee construction phase and a poorly managed/constantly changing project.

Sure did. I tried hourly, but the client insisted on fixed and I caved. Not doing that again.

 

[haynewp]

Tough to say without seeing the plan. Given that there will be lots of steel and glass, and the general appearance of the house, I'd say that it'll be a complicated, high end custom home. Quick internet search says home building prices in Georgia range from $150 to $250 per square foot, sometimes up to $300. So at $250/sf, that puts total construction cost around $1.25M. Structural fee, including a 'complexity' up charge would be in the neighborhood of $12k to $14k

Out of curiosity, what hourly rate multiplier would you associate with a total fee range of 12 to 14k for this 1.25 M project?

 

[dik]

I'm not sure about American prices, but depending on the complexity it would be $10K to $20K for really complex. What is the type of local foundation?... a little more for piles over strip footings. If you need lots of rigid frames, then the price goes up... making allowance for wracking (glass doesn't wrack, so well). Lots of transitions, then lots of joints.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Do you feel any better?

-Dik

 

[dik]

After a bit of an issue about changes, on future projects I established an Extra Service Work Order (ESWO). Changes are identified and additional fees and extension to contract duration, are noted as soon as a change is proposed. You quickly develop a pattern and a template for handling them.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Do you feel any better?

-Dik

 

[phamENG]

haynewp - can you clarify what you mean by hourly rate multiplier? My use of the term doesn't really fit nicely here. I look at that as a way of setting hourly rates, and I usually go for 3x salary (2.67 to cover overhead, 0.33 for profits). Pretty standard. But that's not how I come up with that price. I use that number to figure out the lowest price I'd do it for (effort + contingency) in case I need to negotiate, but try to set price based on value added. If I were going to base everything on hourly rates anyway, I'd just do it all hourly.

 

[haynewp]

I meant what hourly fee rate multiplier would you associate with being able to accomplish that project based the amount of time you think it would take to do it, given the approx 1% of the construction cost estimate. Where I work it is 3.2xsalary multiplier. But that usually isn't enough to cover it because there are also salesmen that also charge at random to projects. So I move it up to 3.3 to 3.4 for estimates. I also use a percentage of the construction cost as one of the guides to setting a fee.

 

[haynewp]

And 3 isn't really that standard around here if you figure in all of the engineers that work out of their house that don't have to support a 3 multiplier. Smaller structural only consulting office are running in the high 2 range. 1% of the construction cost is easier to make work in those cases. I know that using a percentage of the construction cost as a basis is common which is why I asked.

 

[phamENG]

Got it. I'm one of those solo guys at home, but 1) if the market will bear the cost of the big guys why shouldn't I charge the same for the same (or better) product? and 2) I have aspirations of growing so I charge like I'm already there so I have extra to squirrel away and pay for hiring costs and fitting out an office (someday...)

That said, even the big guys around here charge way too low. I had a big firm undercut me by about 20% on a multi-building development. It wasn't an especially complex building and it was a multi-use design, so I'm guessing they were planning on having a junior engineer size a few beams, call out a few shear walls that looked right, and have a draftsman do the rest...

 

[MotorCity]

The big guys have way more overhead than the little guys. Clients should expect some cost efficiency in hiring a solo practitioner working from home than a 10,000 person international engineering corporation. Of course everyone is entitled to charge what they feel their time is worth but its a delicate balancing act between that and what the market can bear.