Repipe Bid: 24 Units and a 90-Day Price Hold
You are estimating a repipe for a 24-unit, two-story walk-up in Hilo. The 1972 copper has pinhole leaks, and the plans call for PEX in the walls with new 3/4 in. trunk lines and individual stops at each fixture. Your takeoff is 720 field labor hours: two journeymen at $45.00 per hour and one apprentice at $22.00 per hour for six 40-hour weeks. Material is $38,000 at today's prices, equipment rental is $2,400, and the permit is $1,800. Labor burden is 38 percent for taxes, insurance, and benefits. General conditions and insurance run 8 percent of direct cost, overhead is 12 percent, and your target profit is 10 percent. The bid form is a lump sum with a 90-day price hold, and your supplier has warned that PEX, brass, and copper can move plus or minus 8 percent in that window. The building stays occupied, access is 8 a.m. to 4 p.m. weekdays only, and the owner's draft contract carries $500 per day in liquidated damages for late completion.
1. Build the bid. Show labor cost, loaded direct cost, markups, and the final lump sum, and state the price per unit.
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Labor by classification, not blended: 480 journeyman hours at $45.00 is $21,600, and 240 apprentice hours at $22.00 is $5,280, for $26,880 straight time. Note that the crew works 240 clock hours, so the 720 figure is person-hours, not hours at a crew rate, which is the classic place bids get inflated or deflated. Apply 38 percent burden: $26,880 x 1.38 is $37,094. Direct cost is labor $37,094 + material $38,000 + equipment $2,400 + permit $1,800 = $79,294. General conditions and insurance at 8 percent adds $6,344, giving $85,638. Overhead at 12 percent adds $10,277, giving $95,914. Profit at 10 percent adds $9,591, giving a bid of about $105,505. Round to $105,500, which is roughly $4,396 per unit and about 30 field hours per unit, consistent with a PEX repipe of an occupied two-story. Carry the math on the bid sheet so the markups are auditable if the owner asks for a breakdown.
2. Identify the two or three biggest risks in this bid and say what you do about each before signing.
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First, material escalation. An 8 percent move on $38,000 is about $3,040, which is roughly a third of the $9,591 profit, so one swing is a real hit and two are not survivable on this markup. Fix: get written supplier quotes held for 90 days, or add a price escalation clause tied to a published index, or add a contingency line. Second, access and productivity. Thirty hours per unit assumes reasonable access, but 8-to-4 weekday-only access in an occupied building means tenant coordination, moving furniture, and daily shutdowns and restarts. Add 10 to 15 percent to labor or state the assumption in the bid so a delay claim is defensible. Third, liquidated damages at $500 per day against a six-week schedule with no float: two weeks late is $7,000, most of the profit. Negotiate a cap, exclude owner-caused delay and inspection delay, and build a schedule with float. Also flag the 1972 wall assemblies: joint compound of that era can contain asbestos, and cutting into 24 units of wall may trigger testing and abatement that is not in your scope.
3. The owner offers 10 percent mobilization, monthly progress billing, 10 percent retainage, and payment 45 days after invoice. Is that acceptable for a six-week job?
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No, it finances the owner with your money. Ten percent of roughly $105,500 is about $10,550 up front. Cash out over six weeks is labor at about $6,182 per week, plus the material, which is front-loaded because you buy PEX, fittings, and stops for 24 units in the first two to three weeks, plus $4,200 in equipment and permit at the start. By the end of week three you may have about $50,000 out and $10,550 in, so peak exposure is in the tens of thousands before the first check exists. The invoice goes out at day 30 and cash arrives around day 75, after the job is finished at day 42, and 10 percent retainage holds back another $10,000 until completion and sometimes beyond. Counter with one of: progress billing every two weeks with net 20, a mobilization plus stored-materials deposit of 25 to 30 percent, or release of retainage at substantial completion rather than final acceptance. If the owner will not move, add the carrying cost to the price.