Angie Hicks answers a member question about whether it's normal for cracks to form on a new concrete driveway and how to talk to your masonry contractor if so.
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Bids are NOT done based on a multiplier on top of materials cost to get labor cost. Think of the consequences in the example you gave - by that method using say plain home depot tile made in Honduras might cost $5/SF materials, so by your method $10 labor. Now, same floor, with Carerra marble or Barre Granite at $75-100/SF - so do you want him charging you $150-200/SF labor when it takes almost exactly the same time regardless of material ?
To put it in simple terms, contractors:
1) figure the amount and cost of materials and consumables needed from the plans and specifications, applying a markup (from 15-50%, depending on contractor and how fancy or specialized a job it is).
2) Then they figure the equipment needed and the operating time to be used or elapsed time to be rented or leased - either opperating hour or elapsed time, or combination of both, especially if it consumes fuel
3) They then figure the labor time for the various trades required to do the job, maybe add an efficiency or ease of work multiplier to those hours to fit the job conditions, multiply those hours by the hourly pay rates, then multiply that times the "load" or "Labor Overhead" to account for employment taxes, workman's compensation costs, health plan, etc, etc.
4) Then they add in the cost of any architect or engineer plans or certifications that are needed, government permits and inspections, etc.
5) Then they add in any subcontractor bids, with appropriate contingency amount for each.
6) All those above totals are added up, an appropriate overall contingency added if needed (typically 5-10%, but on remote site jobs I have seen as high as 200%), and (depending on how contractor figures his costs) at least all the "in-house" costs like his equipment, consumables, and labor costs have a percentage overhead and profit added to them - typically about 100-150%. Some contractors use a lower overhead percentage but apply it to the total estimated job cost, not just in-house costs.
This "company overhead" or "general overhead" or "G&A - General and Administrative Overhead" covers the costs of financing and running the company, management and secretarial and general supply and maintenance costs, buildings and equipment yards lease or mortgage cost, working capital cost, insurance, loan interest, general shop equipment payments, profit, etc. Some contractors use a lower overhead and apply it to every cost in the job, some (especially those doing government work so havingto adhere to government accounting rules) apply a "markup percentage" to materials and rental costs and outside subcontract services, and apply G&A overhead only to in-house costs.
That being said, for a general class of work it does generally (on normal jobs) work out that there is a general multiple of labor to materials cost. For instance, yard work and residential tree work is heavy on labor, so it might have a labor to materials ratio of 3:1 or even 5:1. Detail foundation hand excavation and underpinning can run to 5:1 or more. Many types of building construction like plumbing, tile, carpentry, etc. do end up with a very roughly 2:1 or 3:1 ratio of labor to materials cost. At the other extreme, high energy efficiency or hurricane rated glass installation or a fancy full-building computer and communications system or high-end entertainment center might have a labor to materials ratio of 0.25-0.5 because it is designed to go in pretty fast, but the materials cost a lot.
For your case, a hardscaping ratio could run from 0.5:1 or less to as much as 3:1 or more, for installations with very expensive imported stone and fancy woods and a lot of bought decorative items such as statuary, to the opposite labor-intensive landscaping with lots of sidehill terracing and hand-planted flower beds, hand-dug irrigation system trenches, and manual-placed concrete block or railroad tie walls. Each job should be figured on its own merits - using a "rule-of-thumb" is where people commonly get unpleasantly surprised. That is why you typically get 3 bids unless you have a contractor you trust from prior experience and are confident will give you a fair shake regardless of being sole-sourced. Personally, both for my own purposes and professionally in the design and construction business, I have found sole-source to trusted contractors you have experience with is, in the long run, a BIG money and time saver, as well as making it far more likely to finish on schedule and let you sleep at night.
You need a general contractor - prefereably one who specializes in additions, because you have excavation, waterproofing, concrete, concrete cutting, carpentry, door and window, etc trades to coordinate.
The cost will depend a great deal on your topography around the house - if the base of the window will be above ground level at least 6 inches, then could run about $500 for a legal egress window purchase and about $1000-2000 for installation, depending on how deep into the concrete you have to cut.
If the bottom of the window will be below ground level, then to call it a bedroom (which mandates legal sized second egress and usauully at least one window) then you will have two choices - bring it out into a solid watertight concrete storm cellar with collar to keep water out, stairs, and and weather and bug-tight cellar door that is inward-opening, which means a lot of space for stairs and landings top and bottom, or bring it out into an oversized window well at least 36 inches in diameter, and with steps to ground level, with adequate drainage and waterproofing to keep it dry. Either way, sometimes about as easy to put in an outside door as a window, and might raise property value more. Cost from $2-5,000 depending on how deep into concrete wall you have to dig, whether concrete wsall needs reinforcing with steel frame because of the depth of cut, how easy the digging is, and what your water conditions are near the foundation. The last thing you want to do is create an easy water or vermin ingress with your egress.
Is the wall that the garage is sloped toward and adjacent wall of the home?
If not, it should not be of real concern.
Try to keep the water out of the garage with a gasket on the door.
If the state requires a contractor's license, then he needs to have a license in each state he intends to work in - plus state/local business licenses as applicable.
This does not mean there are not a lot of contractors who cross state lines without proper licensing - the penalties in may cases are not real severe and are just a fine, not criminal, so many take the chance.
As you say - argh - many contractors are not really businessmen and have zero legal education, so many people get burned.
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