Three electrical contractors are each bidding on similar commercial projects with $50,000 in total material costs. Review their approaches to the material-price contingency line item and determine which contractor's approach is the most professionally sound and defensible.
Contractor A: Adds a 4% material-price contingency ($2,000) as a visible line item on the estimate, noting recent trade-publication data showing moderate volatility in copper and PVC pricing.
Contractor B: Adds an 8% material-price contingency ($4,000) as a visible line item, stating that prices 'always go up' and the extra cushion will protect the business.
Contractor C: Distributes an extra 5% across individual material line items rather than listing a separate contingency, so the client does not see it as a distinct charge.
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Three electrical contractors are each bidding on similar commercial projects with $50,000 in total material costs. Review their approaches to the material-price contingency line item and determine which contractor's approach is the most professionally sound and defensible.
Contractor A: Adds a 4% material-price contingency ($2,000) as a visible line item on the estimate, noting recent trade-publication data showing moderate volatility in copper and PVC pricing.
Contractor B: Adds an 8% material-price contingency ($4,000) as a visible line item, stating that prices 'always go up' and the extra cushion will protect the business.
Contractor C: Distributes an extra 5% across individual material line items rather than listing a separate contingency, so the client does not see it as a distinct charge.