The Contract Proposal

By James Allen

Hey Jim! • Picking a contractor • The contract proposal --- • Jim's Q&A's • Ask a question

Small and medium-sized remodeling jobs should be approached somewhat differently from larger scale projects. Jobs the size of a bathroom or kitchen renovation, or smaller, allow for more detail to be included in the proposal, and, because the scope is smaller, the amount of detail isn't so great that it can't be easily digested by the homeowner. Look for detail, the more the better.

Once you have selected one or more contractors to entertain bids, they will send you their estimate for the proposed work. These will range from just a number to a complete contract proposal. Now, just getting a number isn't all that bad, initially. Understandably, a contractor may be reticent about providing a detailed "shopping list" that you could use to obtain further estimates from other contractors.

That's OK. If the number doesn't shock you, you can always then say, "your number looks good, let's see a written proposal." Keep in mind that just because a price is high (as compared to other estimates), it doesn't mean that particular contractor won't provide the best value. You need written proposals to make a comprehensive comparison between bids.

You get your numbers. You consider your budget. What you really want to get, though, is a written proposal from each contractor. I've had prospects that used my proposal, because it is so detailed, as a guide or spec to obtain bids from other contractors.

The problem about using someone else's proposal as a specification is, why didn't the contractor provide a comprehensive proposal to begin with? If he can't write a decent contract, what makes you think he knows enough about the trades to do a proper job? Something to think about, especially if your contracting experience is limited.

A detailed proposal provides knowledge about the undertaking in ways you hadn't thought of, and originality gives insight into the kind of person you are dealing with.

I guess it's possible a given contractor is going to do the same job as another, but remember that the skill sets available in the trades vary widely. I say "possibly" because there are contractors that are anxious to learn new and better ways, and they will compare the specification against their experience, and will comment on it.

However, my view is that most contractors that have been around a while are used to doing things a certain way. And if the number of installation failures is any indication, a lot of them are doing it wrong.

Remember the old saw about how "you can't teach an old dog new tricks?" My belief is that the inertia of doing things the same old way leads many contractors to pay lip service to specifications that are not congruent with their usual methods. Unless there is close supervision and follow-up, you're likely to get that contractor's same old job, or a possibly half-hearted attempt at following new (to them) specification(s).

As for "close supervision and follow-up," unless you are experienced enough to act as a General Contractor or Construction Manager you will have a difficult time following what's going on, and why it's being done a particular way. That's why some folks hire Construction Managers. But that is financially unrealistic for something like a bath or kitchen renovation.

Smaller projects are usually handled by smaller General Contractors or tradesmen, meaning most of the work is done by one or two people, particularly if you have the work done without permits.

So, the supervision is up to you. Remember, knowledge is power. And also, it's your money.

Most of this work involves common sense in that, while you may not have the experience to formulate or execute a project, you can understand a well-written, and well-explained, contract proposal. You can know what you are getting.

In fact, it's job one for a contractor to see that you do understand the contract ... for honest contractors, anyway. Gaming the homeowner is a favorite pastime of unscrupulous contractors. Also, a lot of contractors I've met aren't the sharpest tools in the shed, if you know what I mean, so it works for them to have short, very general proposals.

Insight into the kind of person you are dealing with also comes from sitting down with several contractors and ...

1) listening,
2) asking questions, and
3) noting your own satisfaction and comfort with their answers to your questions. Be very wary of contractors that blow off questions or gloss over details.

You're paying for the work. You have a right to know. Repeat to yourself as necessary.

One comfort indicator is whether the proposal is hand written or typed. True, for really small projects, say around a thousand dollars or less, I tend to use a hand-written work order, if anything, depending on the customer. But for larger-scale projects, if a proposal isn't neatly typed, a red flag should go up. Not a deal buster, mind you; just be alerted.

I think a good proposal should read something like a "how to" pamphlet. A linear progression is easier for most people to follow. After all, a construction project is fairly linear in nature; set up, demo, frame and rough-ins, close-in, finishes, break down.

You should consider a draft proposal. A draft proposal is a thoughtful convenience that allows you to review for accuracy and changes. My drafts are basically the actual contract proposal with "draft" noted at the top of the page. Since my workload largely is bathrooms and kitchens, some of the written material in my proposals is "boilerplate," that is, clauses that are used over and over again in every contract, usually with little or no change.

It's the little changes that trip me up occasionally, and since I prefer everything to be clear before work starts, I find that a draft is helpful to both parties. When all parties know exactly what's going to happen and when, then everyone is working together. As a result, I usually have a good time on my projects.

Some of the elements to look for in a comprehensive proposal are as follows.

• Clear contact information for both parties at the top.
• Brief statements of scope and dust control; more detail on those if requested by the customer.
• Then a series of clauses, each listing the steps taken to demo, prepare, and complete the project, listing each product used, with model numbers as needed.
• Finish colors, who's providing what, brands, construction details, it should all be in there.

My proposals have a section called "General" that lists construction material types (as needed), disclaimers, access, and guarantee(s). Then follows a section called "Statutory" providing information required by the State or by sound business practice, such as a time frame for completion and giving my State Contractor License number.

Aside from the contract, also provide the customer with a work schedule. I lay it out on a spreadsheet, others use a traditional block calendar. It can be updated as often as required during the project, and provides a talking point between parties to allow planning around date conflicts.

A detailed contract isn't an absolute necessity for a good contracting experience. But clarity, up front, clears the minds of both parties of any unspoken, nagging, subconscious issues that will likely come up during the project.

Let's face it, construction problems almost always appear on renovation projects -- one just can't always see what is under the surface. There could be unseen rot, or termites, or improper original framing. I've seen it all.

If both parties are trying to be clear from the get-go, then any issues that do surface during the job are much more likely to be resolved amicably. The customer feels like they have a better grasp of the undertaking, and will be much more likely to be reasonable when faced with unforeseen costs. Folks that feel good about an experience just can't help talking about it. Good for business, that.

Details avoid confusion. Confusion creates conflict. Avoiding conflict will provide a better contracting experience for all.

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