 Most vendors use a tiered pricing structure, which is based on several factors. Some of these factors include the contractor’s sales volume, prompt pay history, and competitive price negotiations. As a result, Atlanta Building Company has enjoyed “top-tier” pricing with most of our vendors. When this particular type of pricing is used in the estimating process, the savings are passed on to the customer. We utilize a very straight-forward and open book method of estimating our projects. Of course the initial site visit and estimate are always done at no charge. The estimates are very detailed and will include every component of the project including: Overhead and Profit amounts. If the total amount is higher than desired, we will do all we can to work with the customer to help “value-engineer” their project. Once the amount and specifications have been established, a contract can be written in one of the following two formats:
- Renovation Cost-Plus Agreement, or New Home Cost-Plus Agreement – This is a form of contract for construction work in which we, as the contractor, are reimbursed for the costs incurred in performing the work on the project, plus a percentage fee. Under this arrangement complete records of all time and materials spent by the contractor on the project will be maintained and presented to our customer. All estimates made by Atlanta Building Company are initially presented in this manner. Pros and Cons to this arrangement are as follows-
- The Advantages:
- There is an opportunity for the customer and contractor to work together to possibly bring the total project cost in under the initial estimate.
- Changes in the work can be made quickly without having to pay for change orders in advance.
- All Trade Contractor and Vendor invoices are submitted to the customer for review.
- The Disadvantage: There is no cap on the total cost of the project.
- Renovation Fixed Price Agreement, or New Home Fixed Price Agreement – This is a form of contract in which the amount to be paid is fixed for a specified amount of work, or specified deliverables. A quote prepared by our team is in fact an Estimate concerning the cost of any project as there is always the possibility of an unknown variable. However, our estimates have historically been accurate to within 3% of the actual cost, with the exception of changes made to the originally specified detail of the task. Atlanta Building Company will agree to enter a Fixed Price Agreement in an amount equal to the original Cost-Plus estimate, plus a 3% contingency. As mentioned above, there are Pros and Cons to this arrangement as well-
- The Advantage:
- The customer knows exactly what the project will cost to construct.
- The Disadvantages:
- Changes to the original work detail are more difficult due to the fact that each modification must be individually priced and paid for prior to any change being initiated. This situation can sometimes lead to substantial delays in starting critical phases of the project.
- Payments must be met at pre-arranged stages of the project.
- Trade Contractor and Vendor invoices are not presented to the customer, since they have no bearing on the payment amount. Thus, any cost over-runs or savings are retained by the contractor.
Atlanta Building Company offers our clientele either type of contractual arrangement and will be pleased to utilize whichever one you choose and are most comfortable with. You see, we prefer to earn your business and not break the bank.
If you have any questions pertaining to our pricing structure, please feel free to call us at 770-783-0960, ext. 1 or if you wish, you can send your question to us at PricingStructure@AtlantaBuildingCo.com
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