What a complete quote contains
A complete quote tells you what is being built, what is not, what products it assumes, what it costs, and when you pay. If any of those five is missing, you are not holding a quote. You are holding a number.
Start with a contingency, because it is the fastest test of whether the person quoting has done this before. On a renovation to an older house we build in a contingency of roughly 10 to 15 per cent, stated openly in the document. Not hidden in the margin. Not discovered in month two. A quote that shows no contingency at all on a 1970s house is not a lower price, it is an unstated one.
Here is what should be on the page:
- Scope written room by room, or system by system, in language you can read.
- Exclusions, listed explicitly. What is not included is more informative than what is.
- Allowances, each with a dollar amount and a unit.
- Products named where the choice is already made. Manufacturer and model.
- A contingency, stated as a percentage or a figure, with the rule for how it gets spent.
- A payment schedule tied to completed milestones.
- The change order process, in writing.
- Permit responsibility. Who applies, who pays, whose name is on it.
- Warranty terms and length.
- Site conditions. Protection, storage, working hours, cleanup, disposal.
The cheapest number is usually the smallest scope
Because the scope is smaller, almost every time. Three contractors pricing the same kitchen buy materials from broadly similar suppliers and pay broadly similar labour rates. There is no secret discount. When one bid lands 30 per cent below the other two, something has been left out of it.
Compare the exclusions before you compare the totals. The cheap quote is usually missing demolition disposal, or permit costs, or electrical upgrades, or the paint, or the flooring transitions, or the plumbing rough in that the new island requires. Every one of those items still has to be paid for. You will just pay for it later, one change order at a time, when you have no leverage and no alternative contractor.
The cheapest quote is rarely the cheapest project. It is the one with the most left out.
The other explanation is worse. Sometimes a low bid is a cash flow bid, priced by someone who needs a deposit this month to finish a job they underpriced last month. That contractor is not competing with us on price. They are borrowing from you.
Allowances, and where they hide cost
An allowance is a placeholder amount for a product you have not chosen yet. Tile, plumbing fixtures, lighting, countertop, hardware. It is a legitimate tool and every honest quote uses a few. It hides cost when the amounts are set unrealistically low.
Read every allowance in the document and ask one question. What can I actually buy for that? Then go to a supplier and check. If the tile allowance buys nothing you would put in your house, the quote is not cheaper than the others, it is deferred.
A properly written allowance names four things:
- The amount, per unit, and what unit. Per square foot, per fixture, per item.
- Whether installation is included in the allowance or priced separately.
- What happens if you spend less, and whether you get the difference back.
- What happens if you spend more, and whether markup applies to the overage.
That fourth point is where money quietly moves. Ask directly whether the contractor's markup applies to allowance overages. Get the answer in writing.
Contingency belongs on the page, not in your head
A contingency is money set aside for conditions nobody can see until the walls are open. Knob and tube wiring behind plaster. A rotted sill plate. A drain that runs where no drawing shows it. Stating it up front is honest. Pretending it will not happen is not.
We tell clients plainly that on an older house we will find something. We do not know what yet. The contingency is how we handle that without renegotiating the whole contract in month two. If nothing gets found, unspent contingency stays yours. That last clause should be in your contract, in writing, because it changes the incentive.
A quote without a contingency is not a fixed price. It is an optimistic one.
Money should follow the work
Payments should follow completed work, not dates. Each milestone should describe something you can walk over and look at. Demolition and disposal complete. Framing complete and inspected. Rough ins complete and inspected. Drywall complete. Cabinets set. Substantial completion.
Watch the front end. A deposit is normal and reasonable, because materials get ordered and trades get scheduled. A deposit that represents a large share of the contract before anyone arrives at your house is a different thing. Money should always be slightly behind the work, never ahead of it. That gap is the only leverage you retain.
Ontario's Construction Act provides for a holdback on the value of work performed. Ask your contractor how holdback is handled and released on your contract, and get that written into the payment schedule rather than assumed.
The questions that expose a thin bid
Ask these six, in this order, and watch how quickly the answers come.
- What is excluded from this price?
- Which items are allowances, and what can I buy for each amount?
- Is a contingency included, and what happens to it if we do not use it?
- What happens if you open the wall and find something unexpected?
- Who is on my site every day, and are they your employees or subtrades?
- Show me your insurance certificate and your WSIB clearance.
A contractor who has priced the job properly answers all six without pausing, because they have already thought about each one. A contractor who is guessing will start talking about how much they want to work with you.
One more. Ask for a written schedule with the sequence of trades. Not a finish date on its own, the actual order of operations. Anyone who has run a site can produce that in a day. Anyone who cannot has not planned your project, they have only priced it.
Send us your other quotes along with the scope you asked each firm to price. We will show you where they differ and what each one left out, whether or not you end up building with One Group. Book a quote review and bring the documents.