They are probably rolling up bids from subcontrators which is why it is broken down the way it is. There should be a detailed scope of work as far as the grade of materials that will be used, finishes, etc. Are they including light fixtures, or are you going to buy them separately and they will install them? Just tell them the bid has exceeded your budget. If they're good at their job they should be able to work with you to figure out where you can save money, but chances are in order to save money you're going to have to give up something and/or compromise on the quality level of something. The savings have to come from somewhere. If you really don't want to give anything up, see if there are any opportunities to postpone part of it so you will have more time to come up with more money. Of course there is no guarantee that at that point it won't cost more.

You contract for scope of work (specifications) & lump sum.

If it is too much, ask for suggestions.

Thanks Kandrews. From your response it sounds to me like this kind of quote with one lump sum seems normal to you and I should not ask for a breakdown of the total figure - yes? You think I should just say hey this is above our agreed total budget, tell me where to cut costs and let them say you can do x,y,z to get the price down?

I think there are a lot of unknowns, just as you said. I'm compiling a list of items I would like clarity on. And when they reply this is where I see an extra $50K or more getting tacked on.

I do need to do all of the work at once because I'm in an apartment building in Manhattan and all the barriers and obstacles that go along with that means that no contractor is willing to come do small projects. I am prepared to have to give up things - perhaps we'll do a tub instead of a walk-in shower, maybe we will keep the ugly surface mounted electrical outlets.

My biggest priority is having really good lighting, which is extremely expensive and challenging because this is a prewar building and you cannot drill into or run electric through the ceiling and concrete beams and columns, which constitute a sizable portion of the walls. It cost $20k to get six fantastic wall sconces put into our main apartment living room. It was one of the best purchases I have ever made. My eyesight it worth it. However, this living area of this guest apartment is even more complex than our living room. We also must completely gut the bathroom because the pipes are just rusted out and enough work needs to be done that it triggers a complete gut according to coop rules.

We were able to get two bids last summer for the remodel we just finished. One bid gave an item-by-item breakdown. One just gave a total cost. I think the difference is the item-by-item company was a large contractor running several in-house teams, with presumably some back-office support staff to help create the bid document. The guy without a breakdown was much smaller--one head guy with 2 main support crew and a bunch of subs. We went with the no-breakdown guy, and he was excellent, but as we made various upgrades throughout the project, paperwork and estimates were minimal and last-minute. I think that more detailed estimates is a function of a larger operation with more support staff, and a higher total cost to go with it.

Thanks for your perspectives. Good to know that a lump sum is typical. Mcarroll, what you are saying makes a lot of sense. This contractor has one project manager and a bunch of subs. It is a small operation.

The previous owners of our current apartment used this contractor to renovate the apartment we now live in. If their work is the same standard, we will be very happy. We got substantially lower bids from other contractors but when I've gone to apartments they have renovated, their work was really shlocky. You get what you pay for and I'm lucky I can afford the more expensive contractor.

I really consider the estimate he gave me to be a rough drafts because the TBD costs were gigantic and many. I realize some change costs are unavoidable, but I want to start with as clear and complete a contract as possible.

our experience was like mccarrolls. for kitchen reno with guy set up to do big projects we got a complete detailed rundown of costs. both quotes we got were like that and interesting to compare. when we added a half bath we went with a guy that was a one man show with no subs to speak of and all we got was a total and a text about what we had to buy ourselves… i’d certainly admit that if i were spending over 100k i’d be more comfortable with a detailed breakdown but i also just spent 25k without any contract sooooo… the nice thing about the fixed price guy is there were no extra charges even when extra things sprang up, but that could easily go south with the wrong person or circumstances…

20k on 6 wall sconces wow!!!! thank you for making bay area construction sound cheap!

Lharpie - Thank you for admitting to having spent $25k without a contract. Can we please just have a judgement free thread for the not smart but do it anyway choices we make - even when we know better?

Bay Area costs vs Manhattan - I think it is not only a function of being in Manhattan but being in a prewar coop, plaster walls, tons of rules, regulations. It involved framing and drywall, routing out plaster for electric, and some fancy pants Italian sconces that are the best lighting I have ever experienced. If we were in a new build coop it would have probably been $5k.

But, I also don't want to be taken for a ride.....

I think the responses above do well to answer your question but let me address an important intangible in any relationship and that intangible is trust. There better be a healthy dose of it in any owner/builder relationship or it's not going to be a happy union. When you want to delete an item you're going to have to trust him that he's giving you a fair number. Same thing goes if you want to add something.

Don't know if you found him via a competitive bid situation or you went the negotiated route. If it's the latter you likely have already crossed the "trust" bridge when you selected him. For the former that intangible may still be an open question

Just something to consider.........

If your expectation is a detailed estimate, you'll need to communicate that to the remodelers you are considering at the initial interview. Some will be willing to provide a detailed breakdown and others won't. In my experience, detailed estimates for remodeling work produce more confusion for prospective clients than they do clarity.

The scope of work should be clearly defined by plans and specifications which you need to provide to each of the contractors if you are pursuing competitive bids. Keep in mind that some contractors may not be willing to invest the time and effort to bid projects, particularly if there is high demand for their services, as is currently the case in many markets.

For smaller projects, producing the documents for competitive bidding can eat up a significant portion of the budget. An alternative is to select a remodeler and work with them to develop the necessary documentation for contract and permit purposes (it's usually only a fraction of the amount required for competitive bidding.) That approach doesn't preclude the participation of an architect on the design team (all of our projects are architect designed.) It does require you to place your trust in a relationship as architectrunnerguy notes above.

This is going to be a long post... Sorry in advance.

First, let me start by saying that the right bid/contract is secondary to the right contractor. A good bid and contract really helps making sure that you and the contractor are on the same page, but a great bid and contract isn't likely to result in a great project without a good contractor and likewise a bad bid and contract are not likely to turn a great contractor into a bad one.

Next, the bid and the contract that the bid will eventually become should ensure that you and the contractor are on the same page. To that end, if you have selected all fixtures and finishes and the bid was based on your selections and includes a satisfactory scope of work, then you don't need, and are really not entitled to, a cost breakdown. The specific ways that a contractor chooses to make profit are really immaterial to you, only that the final cost is reasonable and/or acceptable.

Problems occur when the bid is constructed without selections for fixtures and finishes. There are two ways that a contractor might build an unspecified bid and they are both areas of common miscommunication.

1.) A contractor might select the finishes and fixtures that he is including in the bid, which should be presented in a list in the contract or the bid. In this case you need to ensure that his selections are at least similar to the ones you will make and if you can ask for a modification based on finishes and fixtures you find acceptable. This is an area where a dishonest contractor can pad their bottom line with change orders. For example, let's suppose the contract includes a simple $30 retail flush mount light fixture and you would prefer an $80 fixture. That upgrade would likely need a change order and might trigger a change order fee of $200. This is why the selection of the right contractor is so important.

2.) A contractor might insert allowances into the bid. Allowances are essentially cost-plus contracts inside other contracts. In this instance both the amount and scope of the allowance need to be known. So you need to know the dollar amount that was allowed for finish and fixtures and you need to know whether the allowance is for materials only or materials and installation. Those allowances really should be reasonable, I would ask that allowances be sufficient to select items you find acceptable.

"Cost" has a very specific meaning in contracts. It means the amount paid by the contractor after any discounts he receives and it is not allowed to be marked up. However, the contractor is allowed to add a pre-disclosed profit and overhead to those items (usually known as a builder's percentage). In the case of a cost plus contract not only is the builder's profit your business, contractors are legally required to disclose that information in all 50 states.

Again, having said that. I strongly believe the best results are achieved by finding the right contractor and seeing if you can work with his/her contract. This usually means some clarifying emails that ensure the bid matches your expectations.

Good luck.

You know the amount of added costs and you know your total budget. Give that info to your GC and ask for his recommendations.

Dan - I don't know the dollar amount of added costs. I only know that there were many items left off the estimate. I will ask those to be added, then I'll see what the new estimate is and then ask for his recommendations on where to trim. Does this sound like a good plan?

Bry911 - Thanks for your really extensive reply. I appreciate it. You made really great points.

It sounds like you are choosing the right person if you know their work and have talked to the previous owners about how they were to work with. it’s hard enough getting people to come out to look at projects right now much less spend time writing a detailed bid.

thats how we chose they guy for our bathroom - good friends had used him twice. the funny thing about the contract was spouse is a lawyer and gave him a (joking) hard time about it and refused to get involved/pay him as there was no contract so i wrote all checks. so maybe he’ll remember next time haha. He had last minute cancellation and i was rushing to get stuff in time and forgot to ask…

Lots of good information and comments above.

Everything depends on the type of owner-contractor agreement you have or want:

1) A lump sum contract will only provide a lump sum cost estimate. You don't get to look at individual costs.

2) A time and materials agreement will list all materials and labor. You get to see and approve all costs for labor and materials, plus mark-ups.

3) A cost plus agreement is similar.

Choose what you want and communicate it to the contractor with whom you will be working.

It sounds like your GC is going to be your best partner in staying within your budget. I'd move forward with his help to determine all the costs.

I used 4 different contractors for several projects in Los Angeles and they all gave similar breakdowns to your 9 sections and provided individual pricing for each section. I would say most were closer to cost plus contracts. The projects ranged from $28K labor for a small bathroom to $450K for a large addition. The 3 contractors that did the home remodeling/construction were great, small businesses, fair and honest. We used different contractor because they specialized in different things and due to availability.

The contractor that did the exterior hardscape, driveways and landscape was a large business and their quoting and billing was all smoke and mirrors. That project was supposed to be fixed price but they managed to make everything a change order even when they made the mistakes. We ended up dropping them after the hardscape was done as we couldn't trust them and used someone else for the landscaping, irrigation and outdoor lighting.

Wow, I am saving this thread for potential future projects. So much good information here. Really shows me that I am totally in the weeds Re: doing business with contractors and confirms reasons for my project- phobia, but gives hope and a pathway to greater understanding also.

You are asking if it is typical for total project cost to NOT be broken down. In my experience, that would be atypical and unacceptable for a multi-trade, multi-month project. A lump sum contract has nothing to do with a breakdown of costs. What the contractor should provide you is a Schedule of Values based at minimum on what the G.C. has already given you for the 9 "sections" (each trade/division of project activities). How much detail the G.C. further breaks out each of those costs is up to them. But it allows (and is required by any bank that I've seen) the G.C. to request periodic payments as certain trades/activities have completed stages. And, whether or not the Schedule of Values is perfectly representative (G.C.s like to lean numbers towards the front end payments), it also allows you to make decisions on Value Engineering (e.g. the plumbing is very high - maybe we shouldn't move the Powder Room toilet so we can keep that retractable tv).

Yep,3onthetree, they did provide prior to this bid a schedule of payments based on X% at the completion of Y phase. Thanks for reminding me of that. And, I love your example because today I put the bathroom high on the list and the TV bracket work lower on the list. Good lighting and safe bathroom are top priorities. I think my designer went over board on adding tons of new electrical outlets all over the place and that is one place we could cut back on too.

At its simplest, owner-contractor agreements are about risk and risk sharing. Which of the two parties has the greater share of risk for a project. In a lump sum contract, or stipulated sum, the contractor bears all the risk. All the owner cares about, really, is for the project to be completed at or below the lump sum. In order to do so, and reduce his risk the contractor typically adds contingency amounts to the contract which are not called out.

Time and materials contracts, on the other hand, are contracts in which the owner bears all the risk for the total expense of the completed project. The contractor has little to no risk in such an agreement beyond supervising trades to do a proper job.

A cost plus agreement is something of a balance between the other two types of agreements, where risk is jointly shared to one degree or another, depending on the terms of the agreement. Depending on the project, and common customs in the area, a revenue sharing agreement may also be part of this sort of agreement where the contractor shares in the overall project savings, if any. A 50-50 sharing is common when/where used.

This may help explain why each type of agreement provides different access to cost information by an owner.

Virgil, Houzz should pay you for your comment and turn it into content for one of their user guides.

"A cost plus agreement is something of a balance between the other two types of agreements, where risk is jointly shared to one degree or another, depending on the terms of the agreement. Depending on the project, and common customs in the area, a revenue sharing agreement may also be part of this sort of agreement where the contractor shares in the overall project savings"

I think you're describing a cost-plus-shared savings-agreement. Those are different from cost--plus agreements and have different risk allocations. They are rare, in my experience.

Risk is a bit of a nuanced conversation for several reasons and I am not sure it is really that valuable to the average consumer.

Cost plus contracts largely came about to increase the quality of projects. So what we should say about lump sum (fixed price) contracts it that the contractor bears the risk of price overruns, but is incentivized to cut corners... and that incentive increases as projects become less profitable. So the very protection that a consumer is counting on can become detrimental. In a cost plus contract, there is little incentive for that type of action. I am not saying that all contractors cut corners or do it intentionally, but there was enough evidence of the problem to warrant a solution... a.k.a. the cost plus contract. The purpose of which was to protect the contractor's profit in order to increase quality.

The larger problem is that consumer contracts are actually fairly poor instruments of risk mitigation. In reality, the consumer will always bear most of the risk regardless of the contract type for several reasons. Mostly, there is just the principal-agent problem and the knowledge gap between contractor and consumer is simply too wide to bridge. In short, a consumer is unlikely to provide sufficient oversight and must trust the contractor. Moreover, contracts are just pieces of paper unless you plan on enforcing them. How many times have we seen posters who got hit with a giant bill for change orders at the end of a contract after the contractor ignored all change order procedures? Most just pay the money because it is cheaper than the alternative.

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I know that I am a broken record, but I strongly recommend finding a contractor who you can communicate well with and who you feel you can trust, then ensure your vision for your project and your contractor's vision align. Use the contract to guard against catastrophic problems and establish some procedures and requirements.

I don't want to jinx myself at this stage in the game but wanted to report back that two months into the contract, I'm glad that the costs were not specifically broken down. In some cases, they have done more work than I knew would be involved yet not charged me more. I believe they buffered their contract with room for unanticipated costs, which are going to happen in any project. Thanks all for guiding me on this one.