There are a bunch of general contractors here in the San Francisco Bay Area who label themselves as being “turnkey”.  What does this mean exactly?  It usually boils down to a combination of common selling points that they offer as part of their service:

1. little or no owner monitoring needed - we’ll call you if there is an issue otherwise we’ll take care of it
2. what we build for you will be in ready to use condition
3. we’re a one stop shop for all your needs for the entire construction process - i.e. design and build
4. incidentals outside of major scope changes will be taken care of that arise on the job

Sounds great doesn’t it?  As you can probably imagine this all comes with a hefty price.  Yes, most general contractor’s bidding on our project will have the standard 20% line item as their profit and overhead.  What you need to ASK for and EXAMINE more carefully is the line items that make up their bid.  I’m constantly amazed in hearing how many home owners are satisfied with a blanket reference often put in the bid saying the general contractor’s bid is tied directly to the plan you submitted to them without any supporting documentation.

Here’s an example:

In one of our own bids, $8K specified in the bid applied toward “SITE WORK”.  What we later found out was there was an underlying assumption that we would have to re-grade a large portion of our lot.  This was CLEARLY not needed or called for in our soils report.  Aside from some minor trenching to improve drainage, there was very little site work needed on our project.  (Trenching was actually a separate charge bundled into the foundation numbers on the bid!!!).  When we called this one out, the general contractor sheepishly stated that he must have forgotten the details of the soils report.

What have these general contractors done?  They’ve basically made worse case assumptions for every aspect of what you have on your construction plans.  In doing so, every trade in your project will have an overinflated price so that they can cover themselves in the event something unexpected arises.  If it doesn’t - GREAT!  It goes toward their bottom line.  The devil is truly in the details and the details is what you must ask for - and itemized bid for each trade or phase or task of your construction project.

When you submit your plans to your general contractors make sure you ask for a line by line item bid to see where their numbers are adding up.

What’s the opposite of turnkey?  The nickel and dimer.  With these contractors, every single thing that deviates from your construction plans is potentially up for a change order.  Change orders during construction can get quite expensive.

You can save yourself much of the headache dealing both these types of contractors by writing up an owner’s program and asking for an itemized bid based not only the plans but the owner’s program as well.  I’ll be offering a template and example of an owner’s program on my products page shortly.