Quotes vs. Budgets
Keeping up with client requests for "how much does this cost" is quite literally a full time job for many of us. We quote thousands of jobs per year, and in doing so we've developed two (2) approaches to providing these important predetermined prices for clients.
Due to the nature of the work we do, often it is very difficult to conceptualize the hard cost it will require to get certain jobs or repairs "done". Basically, we sort all requests for pricing into one of two categories: Hard Scope, or Soft Scope.
A Hard Scope is something that is easily defined and quantified. For example:
- The client asks to have us "furnish and install (1) light fixture above their desk." This is easily calculable and can be "quoted" easily.
Thus, these quotes are fixed dollar amounts that are quoted, approved by the client, invoiced and billed accordingly.
A Soft Scope is something that is NOT easily defined and quantified. For example:
- The client ask us to to go through a building and "find out how many bad electrical connections exist in the electrical system." This is something we provide a "budget" for.
Thus, "budgets" are NOT fixed dollar amounts. They're merely a not-to-exceed (NTE) budget that usually encompasses a worst-case-scenario ideal or a specific allowance for a certain predefined amount of labor and materials. When the work is done, we invoice and bill ONLY for what was actually done or materials actually consumed.
Other examples of soft scopes are:
- Troubleshooting anything
- Lighting repairs quoting (since the issue is often not discovered until you access the light fixture and test components)
- Restoration projects after catastrophes
- Client projects involving custom design-on-the-fly wherein the full scope of work is not known and will be conceived while working on the project
More on Not To Exceed Amounts
If a NTE budget has been exhausted, this usually triggers another, more firm quote being generated that allows us to "finish" the task at hand with the new information and clearer scope of work we've determined.
This article has been shared by Direct Service, Construction and Design to specifically accommodate our intended clientele. The intent of sharing this information is to better inform the public of these general topics, expand knowledge and safety for all and provide crucial information in regard to their MEP and building systems and/or assets. It is NOT our recommendation that any article recommendations or how-to scenarios be attempted by anyone other than a qualified or competent person.