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Why do some contractors charge more for the same work?

Updated on July 22, 2013

A conversation between the manager of a glazing firm and the owner of the building regarding cost to complete the repairs.

Replacement of 2 failed thermal units <https://en.wikipedia.org/wiki/Insulated_glazing> on the 4th and 6th floors, 1 spandrel unit <https://en.wikipedia.org/wiki/Spandrel> on the 5th floor, and leaks at three locations on the fourth floor. (2-sided and 4 –sided unitized curtain wall glazing) access from ground utilizing straight boom lift. (Building is 5 years old and original install was poor)


Structural Glazing
Structural Glazing
Structural Glazing
Structural Glazing
Edge Impact glass breakage
Edge Impact glass breakage

Glass Company letter to client

Mr. Client:

You have inquired as to why you were able to discover substantially lower pricing regarding the necessary repair work at your building, and as a result I offer the following;


The nature of the glazing requires multiple visits to perform the work (specifically the structural joints) correctly.


It is possible to take short cuts and reduce the cost of boom lifts and labour, but that type of workmanship is what brought us to this point.


I have allowed for necessary staging of the work to permit proper curing of the sealants providing structural adhesion, with temporary plating to support glass until this is achieved.
Without this step my price would be thousands less. (Note the 4-sided structural leak repair is going to be the most challenging to perform and meet budget constraints – easily it may require double the labour I have allotted – please review the attached guide for greater detail regarding this issue)


Also, a certain degree of pricing reflects the willingness to take risk; since necessary rescheduling due to weather, material defect, and the like, would cost thousands in additional unforeseen expense which is not easily absorbed into a small project of this kind.


If you have qualified labour that is willing to perform the work, to the correct standard, obviously are not risk adverse, and are quoting prices as you have indicated, I would be inclined to suggest you accept their proposals.


I am unable to perform the necessary scope at a further discounted cost, but will maintain my proposed project value for an additional 30 days henceforth for your consideration.

Regards,

Mr. Manager

Response from client to Glass company

Mr Manager:

Thank you very much for the explaination, but this reputable company is providing warranty, and I can't understand how one price is $25,000, and for the exact same work and warranty they are at $13,000?

Sincerely

Mr. Client

Costs explained

Mr. Client:

Our business is not an exact science.... we make educated guesses as to how long things will take.

The range of time required for one elevated thermal unit replacement similar to yours is as follows;

Visit one 4-6 hours x 5 men 20-30 hours

Visit two 2-3 hours x 2 men 4-6 hours

That’s a range of 24 – 36 hours labour and equipment;

At approx $180 per hour = $4,320 - $6,480 a variance of $2,160 per unit

As you can see, holding all other factors equal, it is quite possible for several companies to have different prices based on the range of possible costs due to time taken.

The other factor to consider is the risk that there may be a problem and you will have to repeat the entire install process

· Seed in the glass

· Scratched glass

· Failed seal during warranty period (manufacturer does not cover labour costs)

· Damage during handling/installing

· Weather issues calling off the work.

The final factor is the quantity and quality of labour assigned to a given task;

The aforementioned thermal unit installation could be done with only 3 men on day one and 1 man on day two.

The result being:

· Less safe for the workers – lifting injuries

· Increased chance for handling / install damage

· Less safe for general public adjacent to cordoned off area


Also, one senior installer and four junior installers (half rate) could be used, but for work of this nature it naturally increases risk factors again.

So depending on your tolerance for risk you can vary your price accordingly.

I hope this is helpful.

Regards,

Mr. Manager.


Moral of the story...

This client was seeking to have repairs made to a building that was originally glazed by the lowest bidder through the building developer only a few years earlier.... and it was leaking like a sieve!

He had previously hired another glazing contractor to perform repairs a year earlier and was unsatisfied with the work which took too long and was substandard.

Apparently he didn't learn his lesson.

Rather than focus on cost, it might be more reasonable to consider the skill, knowledge and experience of the companies tendering the work.

A simple rule of thumb.

Low Price - High Quality - Fast delivery (You can only have 2 out of 3)


Mike Holmes

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    • Elissa Joyce profile image

      Elissa Joyce 

      6 years ago from US

      Useful Hub! Thanks to share. Voted Up

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