Labor and Materials Bids

If you get a bid for labor and materials it will probably be a fixed bid. Chances are that a sub won't bill you separately for labor and materials. Why? Well, a few reasons. First, if you could get the materials or the labor cheaper, you would not use them. However, there are benefits to fixed bids as well. What? Basically, if you get a fixed bid for labor and materials and the job takes longer than expected, or the price of materials go up, the sub might not make as much profit as they expected, but it doesn't hurt you any. This is true if the job doesn't take as long, or prices go down, the sub will make a larger profit than they expected, and it still costs you the same. So, a fixed bid can help make a sub more money. It can be a great option for you to if you have a budget, and it is tight, this is a good way to contract subs.

However, you need to be wary of fixed bids for a few reasons as well, sometimes if the sub provides the materials you are paying a premium for the convenience, but could be getting a better deal by purchasing the materials yourself and just paying for labor. Not to mention, if it is a fixed bid, a sub may try to get a higher profit by giving you lesser quality materials. So, keep your eye out for this, and have a quality clause in any agreement you enter into that is a labor and materials fixed bid agreement.

Subs that generally contract labor and materials are: Electricians, HVAC, Plumbers, Flooring, Ceramic Tile, Insulation, Painters, Shelving, Shower doors and mirrors.

Labor Only Bids

If your bid is labor only, it is paid as by the hour or a fixed rate for the job. Obviously the more you pay by the hour, the more the job is going to cost you. So, if you contract to pay by the hour, you had better carefully check the references of that person, and make sure that the hourly amount you are paying is not way more than someone else is offering. Paying hourly wages can be very expensive and frustrating, especially if you don't know what reasonable progress should be. So, a fixed bid based on exact and specifically detailed plans is your safest option.

Labor only at a fixed price is a great way to save money if you are looking to cut costs. Often times, labor is going to be relatively inexpensive, and you can get materials at a great price as well, especially since you won't be paying the premium that many labor and materials contracts include. However, you won't have the convenience of not having to pick up anything, or order anything.