question about contractors

Not sure if this is the right subforum. Please let me know if this is not correct.
so a little background.
wife and I purchased a building to move our small business in (don't want to pay rent for the next 20-30 years).
we need to remodel this place to fit our needs. this is the first remodeling project for either of us.
we hired an architect and the city has approved our plan.
so the next step is contractor bidding. We had a dollar figure in mind and so far all the bids are quite a bit higher than our planned budget.
a Realtor friend said that contractor bids are negotiable because the bids are always higher than realistic and that contractors expect the owner to make a counter offer.
so my questions for you guys are
should we make a counter offer? how low?
we are thinking about subcontracting some of the jobs ourselves. Most likely we'll end up doing some subcontracting ourselves to save $.
the estimates are, according to the contractors, based on the specs specified by the architect. Should we ask the architect to pick less expensive materials/designs.

thanks in advance for the answers.

 

I am a general contractor, when I bid a job high its because I sense over costs somewhere or a huge red flag is "We are thinking about subcontracting some of the jobs ourselves" No offense but I always pass on these type jobs.

It always complicates things when many people are responsible for the job getting done and I have had to wait months for a property owner to complete "his part" of the job and then be furious at me when I cant get my sub out there in two days... Then there are cost overages...

The best option on my opinion is cost plus. Set a price with the contractor for his or her services and then you will be in control of the costs and money..

 

Is your architect not assisting you with the bidding and contract award process?

 

Jason, thanks for the reply. Not sure what "cost plus" is. Our architect mentioned something about added value but we need to have a face-face meeting with him.
as far as the GC goes, we'll have a sit down with some of them to see how they feel about this.
I am not sure if they're intentionally overbidding this or it's just part of the process, like car or house purchase. One usually does not buy a car at sticker price and the seller expects some haggling.
Daryl, the architect is not very helpful at this stage. He doesn't do negotiating but instead suggested that we pick the lowest price.

 

It has been my experience (I rehab houses) that picking the lowest price can be hazardous to your project-add-ons and change orders will sink your budget. I would interview at least 3 GC's, research them and pick the one your most comfortable with, unless his/her price is not within the range of the other GC's.

Many are looking for work right now, so it doesn't hurt to haggle-they might be receptive; they might not. You might find one that is willing to let you do some of the work. If you do, consider picking "finish" jobs, ones that one hold up the GC-tile on the floor, carpet, paint, etc.

 

that's what the realtor said. Since there are more contractors than work right now, prices are negotiable. three years ago, this was not the case.

 

You might find this site helpful - it was recommended to me by a contractor (an excellent contractor).

http://www.nari.org/

 

That's unfortunate. I've been an architect for 38 years now and an important part of my services are connected with the bid and award process. All my projects are bid with a common bid form that lists the various sub-trades as line items. (site work, excavation, concrete foundations, concrete slabs, rough carpentry, finish carpentry, millwork, rough plumbing, finish plumbing, electrical, HVAC, etc. etc.) That way you have a way of comparing bids to see where costs might be shaved off with some careful revisions. You can also avoid potential problems with "extras" if you see the low bidder has an unrealistically low price in some area, or has perhaps missed something. I can't believe your architect would suggest just going with the low number. I would also be talking to the bidders about their approach to the project and their schedule. They may be making assumptions about construction logistics or schedule constraints that could be causing them to add dollars to their number. Sometimes a simple design adjustment can shrink or eliminate those cost premiums. It's all about communication, and the heartburn from these projects often comes from differing assumptions and differing expectations.

 

Is your architect really a professional architect?

I would never cut a client loose with the advice to just take the lowest bid, even if said client made it clear that our relationship would end with completion of construction documents.

 

Our architect is not very helpful. He isn't very involved.
we talked with the two CG we trusted the most and they are willing to do some value engineering to see if they can meet our budget. We'll have to look at what we want and where we can cut the fat.
Thanks for your inputs.

 

a little update.
we may be able to meet our goal by using less expensive cabinetry and defer some of the work for a couple of years (signage, other non necessary items)...
thanks again for the suggestions.