Pricing Materials, Equipment & Subcontractors
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Hello, and welcome. This is Super Structures General Contractors — a national general contractor headquartered in Powhatan, Virginia — here to help you and your clients build something that lasts. We're glad you're with us, and we look forward to connecting with you.
Here's one that matters more than its name lets on — Pricing Materials, Equipment & Subcontractors. Here's what it really comes down to: Price materials with current quotes + waste + escalation, equipment by owned-rate vs. rental, and subs by collecting and scope-leveling bids; carry plugs for missing coverage and reconcile at buyout — because the gap between estimated and actual sub/material cost is where margin is won or lost. Learn it well and it's one more tool nobody can ever take from you.
Beyond labor, the estimate prices materials, equipment, and subcontracted work — and for most GCs, subs are the majority of the cost.
The three
- Materials: get current supplier quotes for major items; apply waste factors; account for freight, tax, and escalation (price changes between bid and buy).
- Equipment: owned (an internal hourly/daily rate covering depreciation, maintenance, fuel) vs. rented (rate + delivery + fuel + operator).
- Subcontractors: priced from sub bids — and the critical skill is scope leveling (comparing bids on equal scope, catching exclusions).
Going Deeper (Intermediate)
Material escalation is real risk — quotes expire, and volatile materials (steel, copper, lumber) need locked quotes or escalation contingency. Know your equipment ownership cost (the internal rate that recovers it) vs. the rental break-even. And manage sub bids carefully: level them apples-to-apples, watch for "low because they missed scope," and carry plugs/allowances for trades you don't yet have covered.
Advanced / Pro-Level
Weigh the self-perform vs. sub decision in the estimate. Carry allowances and plugs for incomplete pricing and reconcile them at buyout — the buyout gap (estimated vs. actual purchase) is where margin is made or lost. Manage escalation risk contractually (price-adjustment clauses), lean on supplier/sub relationships for a pricing edge, and run bid-day sub chaos with a bid board.
Practice Challenge
On bid day, your steel sub's number comes in 25% below the other two. What do you do before using it? (Answer: scope-level it. A number that low usually means they excluded something (erection, certain members, freight) or made an error. Confirm their scope is complete and apples-to-apples with the others before plugging it in — otherwise the "savings" is a missing scope you'll have to cover at buyout, turning a low bid into a loss.)
Takeaway: Price materials with current quotes + waste + escalation, equipment by owned-rate vs. rental, and subs by collecting and scope-leveling bids; carry plugs for missing coverage and reconcile at buyout — because the gap between estimated and actual sub/material cost is where margin is won or lost.
Educational overview — estimating methods and cost data vary by market, project, and firm; build and verify with your own historical data and judgment.