When you need to have a remodel or renovation done on your property, you will need a contractor. It is vital to take your time searching for a seasoned, skilled, and reputable commercial contracting company to work with. Otherwise, you can face some costly, fly-by-the-night contractor swindles, or worse, a botched commercial construction job that puts your business or tenants at risk.
During your search for the right commercial general contractor, you will notice that some offer bid-style proposals, while others offer estimate-style proposals. This may confuse you since they often seem similar, which is why it is important to understand the difference before moving forward with any commercial construction work.
Continue reading to learn the primary differences between commercial contractor bids and estimates, including some pros and cons of each, as well as, who you can trust for full-service commercial design build services in Central Indiana.
Contractor Estimates
Estimate proposals are also known as “time and material” proposals or “cost-plus contracts.” This is because such proposals are written out in meticulous detail, itemizing all materials, hours worked, subcontractor labor, and everything else needed to complete the project (i.e. permits, dumpster roll-offs, portable toilets, etc.). The hired commercial contracting team includes their own fee, which is generally a set percentage of the total cost of the project.
Many commercial real estate proprietors prefer estimate-style proposals because they are the most transparent. This also helps when comparing commercial contractors’ estimates. However, estimate proposals can be very lengthy and can sometimes pose the risk of paying for higher-end subcontractors since you have no control over that aspect of the project.
Contractor Bids
Bid-style proposals are also known as “fixed-priced” proposals or “all-inclusive pricing” since a commercial contractor will provide a comprehensive total for your project after making a full assessment. These are well-suited for moderate renovations or remodeling projects, such as utility upgrades and interior design remodels. For larger-scale commercial construction and remodeling projects, predicting all costs can be more of a challenge.
Within a bid-style commercial contractor proposal, there is usually a set contingency fee that covers any moderate budget extensions; however, it only covers such extensions to a certain specified limit. In the case that a large renovation or remediation is needed, the commercial contracting company will apply this fee as a buffer to cover high, unexpected costs that might affect their overall profit margin. Be sure to discuss this with all commercial contractors you interview for your business’s remodeling and deign build needs!
See our blog, “Key Points That Should Be Included in a Remodeling Contract” for additional tips that will help you make the best decisions for your business objectives. Or simply trust the commercial general contractors at BAF Corporation for unparalleled craftsmanship and client support!
Indianapolis Commercial Construction Company You Can Trust
Contact BAF Corporation at 317-253-0531 for trusted commercial construction services in Indianapolis, Indiana and its surrounding locations. Our skilled and experienced commercial general contractors serve all corporate, commercial, and industrial industries in Indianapolis, Indiana and its surrounding districts. Call today to request free information or to schedule a consultation.
