When choosing the best general contractor for your project, you’ll need to compare different prices. You can do this by asking each potential contractor how much they will charge for their services. There are various ways a constructor or supplier can outline its project costs: an estimate, a quote, and a bid. Although these terms are often used interchangeably, there are significant distinctions between them which you should be aware of.
We will now discuss both construction estimates and quotations in detail to help you understand the key differences between these two concepts:
Contractors use estimates to determine their project’s expected costs. They look at the project’s specifications and choose the required raw materials and labor. Then, they meet with the suppliers to get price quotes for the raw materials. They use these quotes to calculate the estimate.
An estimate may also include subcontracts & equipment costs, overhead, and taxes. Contractors usually develop estimates before or during the bid or proposal drafting procedure. Reputable contractors do charge for the amount of time it takes to provide a precise and accurate estimate.
Construction companies that charge a fee for their estimates will generally provide their clients with an comprehensive document that includes each aspect of their project. If you receive multiple estimates from different companies, the more detailed one will offer an insight that less extensive estimates may have overlooked.
From the contractor’s point of view, a carefully constructed estimate can help the the client manage their client’s expectations for their project and provide them them with the necessary information essential for the project’s success and a good working relationship.
Overall, estimates provide an overview of:
- Services offered by you to help your customers understand the work you’ll complete
- Your projects scope to help your clients understand the various aspects of each of your services
- Any project exclusions to avoid potential misunderstandings or disputes in the future
A quotation refers to a general contractor’s figure from a supplier for the price of materials required for a job. These often remain only good for a specific time (usually around 30 days,) leaving the builder with only that amount of time to purchase the materials at the given price. The materials cost is subject to change outside that timeframe. That’s why there’s often a standard timeframe when it comes to quotations. Quotations expire because the intended construction materials are commodities and their rates tend to fluctuate as per supply and demand.
Unlike an estimate, a quotation provides a fixed rate for a construction project subject to a specific time frame. Once the client accepts your price quote, they must complete the work as detailed in your quotation at the quoted price. That’s why it’s vital to compile a price quote with a complete understanding of what the project requires.
About BelVan Construction
BelVan Construction is a certified general contractor based in Edmonton, Alberta. We provide our clients with precise and accurate estimates and quotations for various construction and renovation projects across Alberta, Saskatchewan, and BC. Visit our website to learn more about our professional contracting services or contact us for personalized service.