What do you need to solicit a quote

Whether you are hiring an architect or a general contractor, in order to ensure you receive a good comparable quotes, there are certain key pieces of information you must include with your solicitation.  If you are missing any of these items you could find that your quotes have a wide pricing spread.  Don't just assume that the high number is wrong, make sure that the basis of all bids is the same.  You can do this in hindsight after the bids come in, but best practice is to ensure that your initial quotes are all on the same basis.  Ensuring that your solicitation includes the following elements is a good way to make sure you get comparable bids.

Scope of Work

The most obvious piece of information is the scope of work.  Your scope of work depends greatly on what type of services you need and what phase of work you are in.  If you are just starting your project, you might need to have some preliminary work done in order to help document the scope for your Architect.  In later phases of work, your Architect's drawings become the scope of work. 

Scope of Services

Another piece of information you will need is the scope of services.  The difference between the scope of work and the scope of services is that the scope of work reflect what you want to build, the scope of services reflects how you want the services performed.  For your designer, this document should address how many design milestones your require, how drawings are to be presented to you, and what level of interaction your Architect is expected to have with the local building department.  For the GC, this should address, site clean-up, working hours, and parking.  These are just a few examples of the topics that should be included.  

Schedule

Another key piece of information that you will need to solicit a quote is your project's schedule.  It's important to let your consultant or contractor know what kind of time you have in mind for the work.  This could impact the amount of resources needed and how quickly they will need to mobilize.  When you are communicating your schedule you don't need to be very detailed.  All you need to have is your key milestone dates identified.  For example, you may only know that you want to start design on a particular date.  You may not know when construction will start or when construction will end.  Alternatively, you may have a specific need date in mind.  If so, communicate your intended end date and allow the bidders to plan the intermediate dates accordingly. 

Contract Terms

Contract terms are another key piece of information when soliciting a quote.  Make sure you know what form of agreement you expect to use before you even asking for numbers.  This will ensure that everybody is meeting the contract terms or at least they're aware of them.

Bid Form

Another key component of a good solicitation is a bid form.  This is less about information for the bidders and more about your ability to compare quotes.  It's not a good idea to allow bidders to submit their quotes in any format they choose.  There is no standard way to quote a project.  Invariably, what will happen is that you will be forced to try and reconcile the differences on the back end.  That can sometimes be impossible and you may find yourself working harder to confirm details with each bidder.  In the end, you may still be left with uncertainties and may be making an uninformed decision.

There are a number of best practices that go along in creating each of these documents.  I'll tackle each of these individually in future postings.  Regardless, the main idea here is that all of your bidders should have the same complete information on which to base their quotes.  If you are not clear, the bidders may make assumptions which could be reflected in higher or lower quotes.  This could lead you to bad award decisions.

Why you need a budget

So you have decided to take on a construction project.  You have a clear vision of what you want and you have a dollar limit in mind for the work.  Are you ready to move to the next level? 

If you have not sat down to estimate the cost of your vision the answer is no.

It is important to note that an estimate and setting a dollar limit are two different things.

Your budget should not be based simply on how much money you have available.  Your budget should be based on a well-developed estimate that meets the scope of work you want.  

You will need to do a little legwork in order to be ready to develop your budget. 

Make sure to invest in preliminary studies and conceptual designs to document your vision. 

Don't be discouraged if your first concept comes in higher than you expected.  There are a number of design options to help lower costs without compromising your vision.  Work with your concept designer to modify your concept until the design has been optimized. 

If your optimized design still exceeds your available funding you have three options:

1. Shrink your program.  If your vision was too grand, you might want to consider a smaller version of your vision.  Perhaps you can do with less square footage or one story instead of two.

2. Phase your project.  Do you need everything all at once to operate, or can you build a portion now and the rest later?  Consider a phased approach which allows you to begin operating while you generate revenue and save for phase 2.

3. Can you secure financing?  There are a number of financing options that can help you reach your dreams.  Perhaps you can finance the cost of the project and actually hang on to more capital.

Preparing an estimate will arm you with the information you need to anticipate your funding needs.   You don't want to start the project unless you know you have the funds to finish the project and you wont know this without an estimate.

Let me know your thoughts and write me if you have questions.