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Allowances: The Tricky Part of Evaluating Contract Bids

Posted by: Cam Fraser

When you embark on a building project, there are a lot of details that aren’t always known up front. A contractor will often estimate a cost for something, and when constructing the final bid on a project, put in an “allowance” of a certain amount, based on past experience, that should be enough to cover the costs for that item. However, this area is fraught with possibilities for unplanned expenses and overages.

Take this example of a bathroom faucet. If a contractor puts in an allowance for a faucet, which one does he mean? What generally happens is that the contractor makes one set of assumptions, and then the homeowner goes shopping for finishes and hardware, and the variances begin adding up.

moen

This Moen Faucet is $209.

This Grohe Faucet is $510.

This Grohe Faucet is $510.

This Rohl Faucet is $1,118.

This Rohl Faucet is $1,118.

These kinds of differences can really make a difference in the final outcome of a project. Make sure you and your contractor are on the same page when it comes to what’s “allowed” for, and when comparing bids from contractors, be sure to ask what, if any, numbers for allowances were included in the bid.

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