Tips & Issues

Tips & Issues

Should I tell a Contractor What my Budget is?

There are two sides to this and everyone will have an opinion. I can tell you that from a contractor’s point of view a customer that is up front with me is much easier to work with and the entire experience is much more pleasurable to all parties involved. If you treat your contractor like there’s always something to hide from him expect the same in return. A good contractor is going to take your budget into consideration and make recommendations based on that budget. When possible, he’s going to estimate the work 10-20% under your target to leave room for the unexpected. With any remodeling work, there’s always the possibility and likelihood that there will be surprises that will have to be added such as mold damage, improper existing framing, etc. The cushion allows room for the project cost to grow without going over your budget. If no problems are found and you decide to spend that money some of the final finishes can be upgraded or other projects added.

Another good argument for disclosing your budget to your contractor is to save you both sometime and aggravation. You may have a $10,000 budget and want $30,000 worth of work. Wouldn’t you like to know your desires aren’t possible before you get your hopes up or spend money on design fees for plans you can’t afford? Likewise, the contractor doesn’t want to put in the hours of calculating the estimate only to find out it was all for nothing or that he has to refigure for a much lower cost after pricing what you specified.

Be fair and honest with your contractor if you expect the same respect in return. You’ll get a lot more out of it with the right contractor.
Ensure your budget numbers are accurate so that you are able to correctly evaluate contractor proposals that may be based on different labor rates, material costs or government fees. Base your budget on credible sources such as an architect or comparable projects in the neighborhood. Always provide a range for the budget – perhaps a spread of 25% from high to low – so that options can be provided by the contractor in terms of different material grades or finish levels.

Providing a budget target helps save everyone a lot of time and energy responding to your RFP. Some contractors work at the high end of the business, and others work at the low end. Being upfront with everyone at the start of the project will help you obtain a solution that fits your budget as fast as possible. As stated by others, get three bids. If your bid package is highly detailed, the bids should be close to each other – probably within 10 to 15%.

Find the contractor that fits your personality and communication first – than select on price second. Best wishes for success!
There is no clear answer on that since it depends in part on what you know how to do. First and foremost in any project is to decide you upper limit. If you do not know that number there is little point to worrying about costs. Second, every project no matter how small or how large always costs more than anticipated. For your own sake, take 20% off the top and set it aside. I run construction for commercial and industrial customers and this money, the contingency, is your insurance. Odds are you will tap it, but never plan on using it for your basic budget. That way when something goes wrong, you have resources to manage.

When you plan a remodeling project, the first thing you need to do is price everything you want to buy and assemble the list. If it is special order or you are totally committed to those items, feel free to buy. If you have time, you should delay. Next, make sure you have a detailed list of what you want done and what you understand is needed. Include the list of things you would buy. Then go out to 3 reputable contractors for pricing. If part of the project is an extra, ask them to separate that out as a separate price. Drop the bid, high or low, that is most out of whack, then call and talk to the others. If the numbers are within 80% of your budget, tell them what you want to spend and ask if there have any recommendations. Sometimes they will tell you then can buy the toilet or tile much cheaper even with the markup. Or they may tell you have to buy 10% extra of an item like tile to cover waste. A good contractor may also ask if you have a few wish list items you want but did not include due to budget. They might not be able to install everything under your budget, but they can make it cheaper for adding things down the line. An example would be to put extra beams in a wall for hanging future cabinets.

No matter what you do though, NEVER change anything based on talking. Always ask for changes in writing. Most problems are the result of miss-communications and they can be expensive. Putting everything in writing keeps everyone on the same page so there is no finger pointing. And always expect something to go wrong because something will. When it does, don’t get excited, just resolve it. And take pictures along the way.

Answers by various sources

John Parashos / Project Engineer

Why do contractors Charge so Much?

You have a college degree, a respectable white collar job and you work hard, but you don’t make $100 an hour.

That would be $200,000 per year! Where do contractors come off charging $100 per hour for labor when they are only paying their technician $35 per hour (including taxes and benefits)?

Let’s take a look. A brutally efficient service company on average bills their service techs out for less than 50% of the time they are on the clock.

The rest is windshield time, warehouse time, paperwork time, on-going training, running for parts, return visits that are not billed, etc.

The technicians are getting paid for all that time but bill customers for less than half of it. So you can knock that $100 per hour the company is making down to $50 per. That leaves a spread of $15 per hour ($50 billed – $35 in direct labor cost).

Now let’s look at the truck the service tech is driving. It costs at least $30,000 without inventory and its life is 5 years.

That equates to 5,000 billing hours(20 hrs/week x 50 weeks x 5 years). It’s worth $5,000 when the company sells it. The truck cost $25,000/5000 hours or $5.00 per billing hour (assuming no finance charges, fuel, oil changes, tires or repairs).

Now factor the wages for the person who took your call and dispatched the technician, the bookkeeper who billed you and filed your warrantee paperwork, the office, warehouse, inventory, taxes, insurance, computers, internet, phones, cell phones, etc.

This is why many companies charging $100 per hour or basing their flat rate pricing on $100 per hour find there is no money left to pay the owner who is taking all the risk and fronting all the money.

Consumers are not the only ones who don’t understand this. Many employees don’t understand.

Without the knowledge of the true costs to run the business, they assume the company is making $70 per hour profit. Many employees who steal from their employers use this as justification in their minds.

Even many small business owners who do not already break down their expenses this way are surprised to learn how much they are losing every time their truck rolls out of the office.

The competitive market works at keeping prices in line. Beware of a company charging below the going rate because there are one or two things you can be sure of.

One is that the company is cutting corners on products, materials, skilled labor, insurance, permits, etc. The other is that the company won’t be in business for long and if you have a problem, you will have nowhere to go.

It’s smart to shop around and keep companies honest but be sure you are comparing apples to apples. Many times the cheapest price is the worst value.

According to Edward Marchiselli, President of consumer advocacy company,

“Once consumers understand the dynamics of why legitimate service companies charge what they do, the fear of being ripped off diminishes and they can select the best company for the job, receive quality work and enjoy the end product without wondering if they paid too much.”

GFCI Testing

National Electrical Safety Month – Focus on Ground Fault Circuit Interrupter Testing

The National Electrical Safety Foundations (NESF) and Siemens is reminding homeowners to test their ground fault circuit interrupters (GFCI) every month – especially during thunderstorm season.

GFCIs are an effective means of preventing severe electrical shock. GFCIs are installed to protect areas of the home, such as the kitchen, bathroom or laundry, where electrical appliances or products may come into contact with water. They are designed to protect against severe electrical shock or electrocution from ground faults. Ground faults occur when the electrical current in an appliance strays outside its normal path, and the human body becomes part of the path through which the electrical current may flow.

An estimated 400 million GFCIs are installed across the country. However, many homeowners don’t check their GFCIs to verify that they are working. GFCIs can be damaged (by lightning or electrical surges during storms, for example) and thus must be tested regularly. In fact, a recent industry study showed that roughly 10 percent of the GFCIs in the field may not function properly.

“GFCIs have probably saved hundreds of lives and prevented thousands of serious injuries in the last three decades.” according to NESF Executive Director Walt Biddle. “An improperly installed or non-functioning GFCI offers no protection against accidental shock. All these devices must be tested regularly to verify that they are working correctly.”

Each GFCI circuit breaker or receptacle has a built-in test button to test the device. It is very important to test each and every GFCI in your home once a month. To test a Siemens GFCI circuit breaker, make sure the breaker handle is in the “ON” position. Depress the “TEST” button. This will cause the handle to move to an intermediate “tripped” position indicating that the GFCI is functioning properly. Reset your circuit breaker by pushing the handle to the “OFF” position first, then “ON.” If the circuit breaker fails to trip, it must be replaced.

By the installation and monthly testing of GFCIs in every home in the United States, the U.S. Consumer Product Safety Commission (CPSC) estimates that more than two-thirds of the approximately 200 accidental residential electrocutions that occur each year in the United States could be prevented. Homeowners should consider the GFCI as a back-up safety device, and not a replacement for common sense and prudent behavior whenever using electrical products. Wherever water and electricity are present, homeowners need heightened awareness and should follow the safety instructions that came with the appliance.

GFCIs are crucial to you and your family’s safety at home. Although May is National Electrical Safety Month, a simple test once a month can help insure that the GFCIs are working properly to protect you when you need them.

Ground Rod

It has been shown through the independent studies above that 3.9 mils of zinc can only be expected to provide protection for 10-15 years in most soil types mimicking real-life field experience.

This is substantially less than the life provided by a copperbonded rod. Although the data gathered by the NBS is over 50 years old, it is still absolutely relevant. Metals still corrode at the same rate today as they did back then. Many of the accepted practices used by the electrical industry today are based on work that pre-dates the NBS study. Let us not forget the work done by Georg Simon Ohm in the 1800s.

Simply stated, the 3.9 mils of zinc on a galvanized rod is not equivalent to the 10 mils of copper on a copperbonded rod. That difference needs to be accounted for. ERICO recommends the following guidelines be used for selecting ground rods:

3.9 mil zinc coating: Acceptable for facilities having a service life of up to 10 years. Not
recommended for deep driving applications.

10 mil copper coating: Acceptable for facilities having a service life up to 40 years. Acceptable for deep driving applications.

13 mil copper coating: Acceptable for facilities having a service life up to 50 years. Recommended for deep driving application.

It is important to remember that the ground rod is only one component of the grounding installation. A superior grounding design will address every aspect of the system and seek to include high quality products that maximize value to the facility owner.

What is a good ground resistance value?

There is a good deal of confusion as to what onstitutes a good ground and what the ground resistance value needs to be. Ideally a ground should be of zero ohms resistance.

There is not one standard ground resistance threshold that is recognized by all agencies.

However, the NFPA and IEEE have recommended a ground resistance value of 5.0 ohms or less. The NEC has stated to “Make sure that system impedance to ground is less than 25 ohms specified in NEC 250.56. In facilities with sensitive equipment it should be 5.0 ohms or less.”

The Telecommunications industry has often used 5.0 ohms or less as their value for grounding and bonding.

The goal in ground resistance is to achieve the lowest ground resistance value possible that makes sense economically and physically.

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