How to bid a job repairing hidden damage in stages to avoid a “time and materials” job

Question

My bathroom has some water damage from a poorly designed tile job. The window sill is low enough to get wet but is simply tiled rather than a solid shelf. It's also not properly sloped. This has allowed water to leak into the wall and has weakened the backing board to the point that the tiled wall gave in when leaned on.

One builder wouldn't even estimate the cost of the job. Wanted "time and materials" for the repair and a contract to demolish and remodel the bathroom.

I have been burned by "time and materials" jobs before. Yet I understand that it's difficult to evaluate how big the job is when you can't see all the damage.

Here's my question: Am I being unreasonable if I insist that the job be done in three stages that are bid separately?

A bid for the demolition to expose the problem

A bid for the repair rather than any "time and material work"

A bid for the remodel for any upgrades to the bathroom.

I could take competing bids at each stage and be sure of what I'm getting into before agreeing. Builders wouldn't have to agree to any work they haven't had a chance to fully see.

I'd like to know if this kind of plan is unheard of or unreasonable. Is there any good reason to refuse to work this way? An alternative way to structure the job? If there is something I simply don't understand please let me know.

Answer 1

My suggestion should make this a whole lot easier all around. Do the demolition on a DIY basis and clear away all the debris. The demolition phase work requires basic skills and simple tools that are not expensive.

This will open up the structure of the whole room back to framing, subfloor and ceiling joists. I would say that then you would be ready to bring in a contractor to bid on repairs and upgrades to the room and structure. Nothing should be hidden at that point.

As you take on the DIY part of the project you are sure to have some questions about that process. This site can be a big help to get answers to the questions that arise.

Answer 2

Reasonable, except to say that I personally wouldn't be willing to bid the remodel until the repair was done. (Assuming repair by others.)

For permit reasons, you wouldn't close in the repairs, so be sure to move that to the remodel phase.

One disadvantage to this plan is that you're not building a relationship with any one contractor... that might or might not be important to you, but as a broad generalization, I'd say contractors take larger jobs more seriously and shy away from customers that make them nervous.

One last note, probably obvious, but... this will take much longer.

Answer 3

These jobs are tricky to bid. We have an "alternative structure" as you put it. The way we work them is usually this

First, we bid the known scope items. This could be painting, plumbing, electrical, flooring, etc. This is the stuff that will happen regardless of damage.

Next, we bid known repairs and we make a guess as to the extent of the scope if we cannot see all the damage and set a price based on a written set scope of the unseen repairs.

Then, we add a guessed amount for assumed repairs that we are almost sure we will need to complete. These are line items usually are T&M items with a not-to-exceed price without approval. The line item might have a price of say $350, but the detail reads something like "the amount is estimated. Actual repairs will be completed at a price of $xx/hr plus materials. Amount not to exceed $350 without approval" Sometimes these items are not completed for a discount to the owner. Other times things are worse than expected and completed for an APPROVED increase in cost via a change order.

Then just to top things off, we usually add a verbal disclosure of some other repairs that we can think of due to possible damage, but do not show enough evidence of and therefore do not bid it upfront.

Finally, there are the variables we could not see and those we effectively either complete at a T&M price with a verbal estimate of the repairs (trust is usually high on our jobs) or we submit contractual price for the work for those variables via a change order before the repairs are completed and only continue when the change order is approved.

Using this process, we minimize the variables, set well defined expectations of what cost are set and what cost are variable, and finally we put the decision making power in the hands of the client on the variables of the project BEFORE they end up with an unexpectedly high bill.

Let us not forget that verbal estimates are just as binding as written ones so in those rare cases where things need to move on NOW, we work through options, give a verbal estimate, and get approval to proceed and then document the verbal estimate on the back end with a change order.