CONTRACTOR CHAT: Quoting Tips Part II - Structuring the Estimation Process

When preparing an estimate for a job on a pre-1978 structure, keep in mind your reputation and the value of honesty with the customer. We would caution you to not to rely on slick language in the contract in order to present low bids.  As we all know, the importance of referrals in the renovating business cannot be overstated.  Your reputation as a quality minded, reputable firm will suffer if any trickery is used in bids that result in the final cost becoming higher because of RRP compliance. The whole point of RRP compliance is following the rules laid out by the EPA.  Most people will understand the need for added costs because of rules that make a job safer, both during the construction process and in the long run. Next, decide how much time to invest in the estimation process.  You may have a good idea about how much the RRP will add to the cost, as well as a feeling of how likely it will be that you will get the job. Our advice is to not spend an inordinate amount of time with details if you feel you won't get the job and recover your time costs in preparing the quote. Also, keep in mind that some jobs will now be unaffordable for some customers because of RRP Rule compliance.  This is where you need to use your experience and "read" your customers. It may be worth your time to prepare a checklist of all of the factors of RRP, so that nothing slips by unexpectedly.  It also helps to show the customer what the government is requiring and how that played into structuring your quote. A checklist will also be of benefit for making material orders later on, as you should know how much of each component used for RRP will be needed on the job.  Each line item can have a cost factor included, either on a spreadsheet or printed checklist format, or whatever method your company uses. Once you’ve come up with a number you are comfortable with, (while remembering to add the costs of doing the work itself, photographing and documenting the job, etc.) then create an approach to the client for addressing the added cost. It will be understood that there is no way around the charge, and that your intention is to be fair and up-front about it. You could consider a statement to the client like, “If a competitor presents a bid ignoring the costs of RRP, it should send a huge red flag to you about how they conduct business, and you should know that they are operating illegally and putting you and your family possibly in harm’s way, unless of course they are providing the service free of charge to you within the bid”. The main thing is just to be descriptive enough about the need for compliance and expected costs, and then have that understood so that from there, you can both be focused on  a quality job done, without worrying any further about the EPA rule.

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