A new landscape project typically comes with a large cost and it’s important to understand how pricing can be provided to you. While estimates and contracts can be very similar at first glance, there are key differences that are important to know when you’re getting pricing for your project.
Estimates
Estimates are typically meant to provide you with a cost range and give you a general ballpark for where your project could land.
Many times, estimates will decide price points based on typical current material & labor costs rather than specific materials. Most likely the contractor is providing an estimate based on a set of plans and a few pictures of the site, but it doesn’t involve a site visit.
Estimates usually aren’t legally binding and don’t guarantee a final total cost. The pricing provided in an estimate can be lumped together by category or material rather than a complete breakdown by line item which can be tricky to decipher especially when you’re trying to install in phases. Some contractors may be able to give you an estimated timeframe for your project at this point, but most contractors won’t hold a spot on their calendar for a project until a contract has been signed. Estimates can be delivered verbally or in writing.
Estimates are great for early project planning but shouldn’t be seen as a final price as there are several variables that aren’t factored in an estimate. These variables can include current site conditions, site access, complexity of elements, material selections, scope and/or phasing, etc.
Contracts
Contracts, sometimes referred to as proposals, bids, or contractor’s quotes, provide a comprehensive line-by-line item bid. There are two types of contracts, fixed price and time & materials (T&M) contracts.
A time & materials contract will often stem from an estimate and are not always as detailed as a fixed price contract will be. If the project is exceptionally complex or have elements that are difficult to estimate, some contractors will provide a time & materials contract to make sure that they get paid for the required work even if it takes longer than anticipated to complete. Because there is not a set final price, T&M contracts can have unexpected overages and costs. While it’s important to review every contract before signing, it’s especially true for T&M contracts to make sure that everything in the project is being accounted for (correct material selections, estimated timelines, etc). As there is no set price with a T&M contract, a contractor should be providing regular reports about job progress and keeping you up to date on where they are within the price provided to you at the start of the project.
A fixed price contract, on the other hand, will guarantee that the scope of work will be installed for a specific price. Unless work is added, changed, or taken out of the scope, it’s expected that the cost will not go over the provided and agreed upon price. The final price is normally divided up on a payment schedule and is often tied to project milestones (start, midpoint, finish). The contractors that we work with provide our clients with a fixed price contract. Items like permitting and utility costs are either provided as an allowance or T&M due to the requirements of these parts of a project.
Our process starts with sending over our bid sheet, plan set, and a few pictures of the property to the contractor. We will typically schedule a site visit to walk the entire site, review the bid with the contractor, and answer any questions they might have. As these contracts are highly detailed, the contractor will take a few weeks to go through everything with a fine-tooth comb. Once we receive the contract, we review it fully to check for any clarifications needed before sending to our clients. We will have a phone call to review the bid and answer questions and finalize the scope of work and/or phasing options with the client before they sign the contract from the contractor. Once the client signs the contract, a spot is secured on the contractor’s calendar, and we prepare for installation.
When a contractor makes a bid for a project, they are using current and specific material prices and labor costs. Because of this they are typically only valid for a certain period of time (ie 30, 60, or 90 days). Prices fluctuate often and quickly so although it’s important not to rush into a major cost like this, it’s also good to know how long the contract is good for before the contractor will have to revisit and potentially change the pricing.
When you receive a contract or proposal, it’s also the perfect time to talk to the contractor about timelines for how long they think the project will take and when they will be able to start on your project. Most contractors may pencil you in on their calendar but won’t guarantee your spot until they receive a signed contract (and sometimes a deposit).
Barring any change orders in scope, material selection, etc, once signed, a fixed price contract becomes legally binding and the price is final (a T&M contract will also be legally binding once signed but the final price is not set by a signature). This is one of the biggest differences between a contract and an estimate. Contracts are also always delivered as some type of document whether it’s a typed & printed version or an e-doc, while estimates can either be written or provided verbally.
If, during installation, an unforeseen issue comes up or the scope changes or a material needs to be changed, a change order will be provided by the contractor. The cost of a change order should always be shown to you as they are a modification to the originally signed contract. You should always have a chance to approve and sign the change order before the new work is started.
Soliciting estimates and contracts/proposals/bids can be tricky but knowing the differences between the two will help you confidently navigate the process. Having a clear understanding of how your project is bid will ensure a successful and stress free installation without unexpected costs.
If this is something that you’re not comfortable with or feel out of your wheelhouse, we offer our client consultation services to our design clients. If you’re ready to get started on your design, you can contact us here.
~Colleen
