Residential Proposal 1

[COEngineeer]

We do mostly residential structural design. I just want to get your inputs on how you usually come up with the amount on the proposal. What is the effective way to do proposal? I feel that square footage is not very effective because some projects are more detailed than the other. Remodel is always harder than new projects but usually remodels are usually low budget projects. I want to write an excel spreadsheet to help me with this process. Any tips will be appreciated (especially if you are in the same business).

Never, but never question engineer's judgement

 

[csd72]

My first boss used to estimate how many drawing sheets would be required and estimate it on a per sheet amount.

Seemed to work for his jobs.

 

[msquared48]

Four ways:

1. As CSD 72 says if you are doing the whole job to include drafting.

2. On a cost per square foot basis as you suggest, but factoring in a higher cost for more complicated jobs - say $1.00 to $1.50 per square foot of the building.

3. On a percentage basis of .5% to 2% of the total cost of the job, and

4. On a hourly basis, estimating hour total hours and adding 15% for profit for the firm.

Run it all four ways and see what the average, the market to get the job, and your guts tell you. That's what I do.

Mike McCann
McCann Engineering

 

[rday]

COEngineer,

Mike covers it pretty well. I will add a couple of thoughts as I'm in Colorado and used to exclusivly do residential work.

I agree it varies with complexity. I review the plans and estimate based on hours to complete the project and required site observations. Back calculate the square foot costs.

Our square foot costs rarely go below $1.30 anymore where when I started they averaged about $0.85. This seems to hover around the 1% of constuction costs mark.

 

[COEngineeer]

rday, our bids are around the # you gave me also. But recently I feel that $1.30 is not enough. I think it varies with architect too. Some architects I love the way they stack their walls, but some architects do not really consider how loads get transfered down. Sometimes I just get frustated and want to quit my job and go join a group that does commercial work only.

Rday, if you have 700 sq ft pop top, $1000 is too small I think. I started to bid $2/ sq ft. Do you agree? An addition however, I agree $1.30 is a pretty fair #.

Never, but never question engineer's judgement

 

[JamesBarlow]

I don't have anything to do with residential work so take this for what it's worth but I find it amazing that I would pay more to lay a linoleum floor in a house than to hire the engineer for the project.

 

[rday]

COEngineer,

I think you're in line. I was really only considering new construction. My bad.

JamesBarlow,

I share that amazement and always have. The worst part is, even with those numbers people still give you the OMG it's so much. And someone will always do it for half what I propose.

 

[csd72]

rday,

That is exactly the problem with this industry, there is always someone who charges far too little.

 

[rheim]

COEngineer,

for remodeling jobs, I gave up the idea of being able to calculate an accurate price based on parameters such as squarefootage, construction cost, or whatever.
After reviewing the scope of work, I rely on my guts (which of course are backed up by some years of experience). Sometimes I win, sometimes I lose. As long as it averages out on the long run, I'm ok.

 

[JRESE]

This will sound kind of simplistic, but you should charge what the job is worth. What is the job worth? It has nothing to do with how many sheets, or how many hours. It is WORTH WHAT SOMEONE IS WILLING TO PAY FOR IT. My fees vary tremendously, depending on my sense of what the client will bear. The conditions of the market vary all the time. Sometimes all of the engineers in my area are busy, sometimes not. Sometimes, the project architect strongly recommends me to the client, so my competition is limited. If you have been in the business for a while, you will have noticed that developers always have a sense for when they can take advantage of the market when hiring architects and engineers, and they vigorously do so. Ideally, you should have lot of contacts in the local market (design professionals, builders, subs, real estate people) that help you determine what current conditions are. Being a one-man firm, my ability to “view” the local market is small unless I cultivate those contacts.