Oh No...The Bids Came In Too High! Now What?!

It’s a tale as old as time…you’re all excited about your project, you’ve got preliminary designs in hand, done by an experienced architect, you’ve got three bids from reputable contractors…and…they’re all higher than what you wanted to spend.

Maybe *a lot* higher.

When you ask the contractors, they say stuff like “sub prices supply chain price increases labor shortage blah blah blah” but all you can see is your project disappearing from your future like an ice cube on a hot day.

Is your project dead? Do you just have to pony up 2x what you were hoping to spend? What are your options?

In my two decades in this industry [first on the contracting/estimating side, now as an architect and real estate owner/investor/operator], I’ve never seen a project bid come in *lower* than expected. It’s just not the way things work. But that doesn’t mean you have to accept whatever numbers the contractor throws at you.

Before going further, though, I want to remind you: these are just bids. You haven’t spent the money yet.

What you have in your hands is *information.*

Try not to get emotional, just see it as data - data that will help you make much better decisions about the design and the project.

A house we lifted and shifted so we could get clear headspace in the basement…not your typical residential project!

[In my firm, we aim to get ballpark bids from trusted contractors *very* early in the process, so we can use that cost information to hone the design and ensure that the project will fit the budget. We also use it to compare options, and allow our clients the maximum amount of time to get their financial ducks in a row.]

So let’s dive in….here are five of my favorite pointers for confronting bids that are higher than your expectations, or higher than your budget.

I’m going to assume you’re already working with a reputable and experienced team. If you aren’t, you need to back up and fix that first. Literally any guy with a truck and a toolbelt can give you a price for a project - what you want is a team that will be truthful and honest with you, not just tell you what you want to hear.

1. Are you being realistic?

Let’s start by taking a look at yourself. In my experience, people are very quick to point to everyone and everything else before taking a hard look at their own decision making. Have you been making decisions that increase the project scope from what you initially brought to the architect? It’s called “scope creep” and it’s real! For every one of those decisions, did you also increase your budget?

As an example, let’s say you’re planning on building a new home, and you initially planned for the basement to be unfinished. During the design phase, you changed your mind, and asked the architect to design the basement as a finished space, with a kitchenette, home gym, a hangout room, and bathroom. Your architect should say to you, “Sure, client, I’m happy to add that to your project. Do you understand that the cost of the project will now increase as well?”

In my experience, many clients gloss over that conversation. “Sure sure, yeah, I get it. And think how cool it will be to have the basement finished!” Then the numbers come in, and that “quick” add becomes a 6-figure addition to the project budget…