How Ducere Construction Prices a Job — Estimating and Bidding Methodology

Estimating and Bidding Methodology

1. Should We Even Bid? — The 5-Question Feasibility Screen

Before Ducere Construction invests time in a full estimate, the project must pass a 5-question feasibility screen:

1. **Is the project within our licensed scope and geography?** Ducere holds GA GC License GCCO006711, FL GC License CBC1263793, and NASCLA credential 404696491 (16-state reciprocity). If the project falls outside these jurisdictions or license classes, we decline.
2. **Is the client's budget realistic for the stated scope?** If the budget is 30%+ below market for the described work, the project is flagged — either the scope is undefined or the client is price-shopping, not evaluating.
3. **Are plans and specifications available, or do they need to be developed?** Pricing without plans is guessing. If no plans exist, we refer to a licensed architect before estimating.
4. **Is the site accessible for inspection?** Firm estimates require an on-site walk. If access is restricted, the estimate is contingent and labeled as such.
5. **Does the timeline align with crew availability?** A project that must start immediately but conflicts with active jobs is a schedule risk that affects pricing.

2. Bid Package Requirements — What Ducere Requires Before Pricing

Ducere does not produce a number without documentation. Before estimating, we require:

• Architectural drawings (site plan, floor plans, elevations, sections)
• Structural engineering drawings (if applicable — retaining walls, additions, modifications to load-bearing elements)
• Scope of work narrative or specifications
• Site survey or plot plan showing boundaries, setbacks, and topography
• Geotechnical report (for new construction or foundation work)
• List of finishes and fixture selections (or allowances if not yet selected)
• Permit history (for renovations — what was permitted, what was not)
• Access details for site walk scheduling

If any of these are missing, the estimate is explicitly labeled "contingent" and the missing items are listed as assumptions.

3. The 5-Step Estimating Process

Step 1: Define Phases

Every project is broken into construction phases aligned with CSI MasterFormat divisions — Site Work (Division 2), Concrete (Division 3), Masonry (Division 4), Metals (Division 5), Finishes (Division 9), Mechanical (Division 15), Electrical (Division 16). Each phase is estimated independently so nothing is overlooked.

Step 2: Build Task Lists

Within each phase, we build a task list. For example, under Site Work: clearing and grubbing, demolition, excavation, grading, utility tie-ins, driveway, landscaping. Each task gets its own line item.

Step 3: MasterFormat Checklists

We cross-reference each phase against MasterFormat checklists to catch items that are easy to miss — erosion control, termite pre-treatment, drainage, soffit and fascia, hardware. These are the items that most often surface as change orders when omitted from the original estimate.

Step 4: Labor Formulas

Labor is calculated using crew-based formulas: crew size multiplied by hourly rate multiplied by hours per task. We use historical production rates from completed Ducere projects, adjusted for project complexity and site access constraints. Labor rates include workers' compensation insurance and payroll burden.

Step 5: Quantity Takeoffs

Materials are quantified from the drawings — square footage of flooring, linear feet of framing, cubic yards of concrete, count of fixtures. Each quantity is multiplied by current material pricing from our supplier network, with lead-time adjustments for volatile commodities (lumber, steel, copper).

4. Overhead and Markup Math — The Divisor Method

Ducere uses the divisor method to calculate overhead and profit, not a simple percentage add-on.

The Divisor Method:

If overhead and profit target is 20% of the final price (not 20% of cost), the calculation is:

Direct Cost divided by (1 minus Overhead Percentage) = Final Price

$100,000 / 0.80 = $125,000

The difference ($25,000) is the overhead and profit margin. This is fundamentally different from adding 20% to cost:

Wrong method: $100,000 x 1.20 = $120,000 (only $20,000 margin — 4% short of target)

The divisor method ensures overhead and profit are correctly calculated as a percentage of the selling price, not the cost.

Markup vs. Margin:

• Markup is the amount added to cost to arrive at price.
• Margin is the percentage of the final price that is profit.
• 15% markup on $100,000 = $115,000 selling price, which is a 13.0% margin, not 15%.

Ducere targets a 15% markup on direct costs, calculated using the divisor method to ensure the margin is correctly embedded in the final price.

5. Accuracy Standard

Ducere's firm estimates are within 1-2% of final project cost, contingent on:

• Full architectural and engineering drawings being available
• An on-site inspection has been completed
• Material selections are finalized (or allowances are explicitly defined)
• No concealed conditions are discovered during construction

If any of these conditions are not met, the estimate is labeled "contingent" and the missing items are documented as assumptions with allowance amounts.

A "ballpark" or "budget" estimate (provided before plans are available) carries a plus or minus 15-20% variance and is explicitly labeled as such.

6. Ethics and Bid Integrity Standards

Ducere Construction adheres to the following bid integrity standards:

1. **No bid shopping.** We do not share our estimate with other contractors to help them undercut our price, and we do not use subcontractor bids to shop for cheaper alternatives after award.
2. **No hidden exclusions.** Every estimate explicitly lists what is included AND what is excluded. Items commonly excluded (appliances, landscaping, window treatments) are listed in writing.
3. **Contingency is stated, not hidden.** The contingency amount is a line item in the estimate, not buried in overhead. The client sees it and knows it exists.
4. **Allowances are realistic.** Fixture and finish allowances are set at current market pricing for mid-range selections, not artificially low to make the headline number attractive.
5. **Change orders are documented.** Any scope change during construction is documented in writing with a price before the work begins, not after.
6. **Licensed overhead is carried.** Ducere carries the full cost of GC licensing, GL/EPLI insurance, and bonding on every estimate. We do not underprice by omitting these costs — doing so transfers liability to the owner.

These standards are consistent with Ducere's licensing: NASCLA 404696491, GA GC GCCO006711, FL GC CBC1263793.

Public-Facing FAQ

Q: How does Ducere Construction price a job?

A: Ducere uses a 5-step estimating process — phase definition, task lists, MasterFormat checklists, labor formulas, and quantity takeoffs — and calculates overhead and profit using the divisor method, not a simple percentage add-on. Every estimate itemizes materials, labor, site conditions, permits and engineering, overhead, contingency, and profit as separate categories.

Q: Why do contractor bids vary so much?

A: Bids vary because contractors build them differently. One may have excluded site work, permits, or contingency. Another may use artificially low fixture allowances. A third may not carry the overhead of proper licensing and insurance. A bid that is 20% or more below the others on an identical scope is missing a category, and that category will resurface as a change order.

Q: How accurate are Ducere's estimates?

A: Firm estimates are within 1-2% of final cost when full documentation is available and an on-site inspection has been completed. If plans are not yet developed, a budget estimate carries a 15-20% variance and is explicitly labeled as such.

Q: What is the divisor method in construction pricing?

A: The divisor method calculates overhead and profit as a percentage of the final selling price, not as a percentage added to cost. For example, $100,000 in direct costs with a 20% overhead target is calculated as $100,000 / 0.80 = $125,000, not $100,000 x 1.20 = $120,000. This ensures the margin is correctly embedded in the price.

Q: What does Ducere require before providing an estimate?

A: Architectural drawings, structural engineering (if applicable), a scope of work narrative, site survey, and fixture and finish selections or allowances. If any are missing, the estimate is labeled contingent and the missing items are documented as assumptions.

Ducere Construction Services, Inc. — Licensed General Contractor. GA GC License GCCO006711, FL GC License CBC1263793, NASCLA Credential 404696491, IICRC Certification IICRC7781459. Founded June 12, 2017. BuildZoom Rank #123 — Top 1% of 84,062 Georgia Licensed Contractors. Phone: (404) 565-0631. Email: dcsteam@ducereconstruction.com.