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MightyMoe
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Got one of those emails requesting a bid. 

Seems this is construction for elderly housing. 

I'm guessing there is some federal money involved.

So there is a 5% retainage, but the kicker is that a vender can not earn greater than a 6% profit.

Basically you are barred from making any money on the job, or none until the contractor's one year is up, probably a year and a half or two years after you have finished. Meantime you are a banker and sending out invoices at 0% interest. Who takes these jobs anymore?

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Paul in PA
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It is not unusual to work on Habitat for Humanity projects for free. This appears to be an opportunity to have your  crew labor and overhead costs covered, so that only the professional is working for free.

That is who.

Paul in PA

 

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MightyMoe
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Posted by: Paul in PA

It is not unusual to work on Habitat for Humanity projects for free. This appears to be an opportunity to have your  crew labor and overhead costs covered, so that only the professional is working for free.

That is who.

Paul in PA

 

This isn't a habit for humanity project. I've worked on a number of elderly housing projects from platting to staking, never was required to lose money. 

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James Fleming
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On every federally funded job where I've had to submit a form 5700, the mandated "profit" is separate from any "profit" built into the hourly rate

Example

Sr. Party Chief -  $40.00/hour

Sr. Instrument Operator - $30/hour

Indirect costs 149.81%

Effective crew hourly rate $70 + $104.87 = $174.67

Then after all the time for each labor category is computed and totaled to get the total project cost, the profit multiplier is applied   to get the total project price.

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R.J. Schneider
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Posted by: James Fleming

On every federally funded job where I've had to submit a form 5700, the mandated "profit" is separate from any "profit" built into the hourly rate

Example

Sr. Party Chief -  $40.00/hour

Sr. Instrument Operator - $30/hour

Indirect costs 149.81%

Effective crew hourly rate $70 + $104.87 = $174.67

Then after all the time for each labor category is computed and totaled to get the total project cost, the profit multiplier is applied   to get the total project price.

Party

 

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R.J. Schneider
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Not sure how this works, but if you were to lock in a contract, at a present 6% return, in an uncertain rate hike environment, what happens to your 6% profit when you pay out your creditors at the present value, but are on one of those half year, or better, receivables schedule in the future value sense ?

 

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Jitterboogie
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Posted by: R.J. Schneider

Not sure how this works, but if you were to lock in a contract, at a present 6% return, in an uncertain rate hike environment, what happens to your 6% profit when you pay out your creditors at the present value, but are on one of those half year, or better, receivables schedule in the future value sense ?

 

Welcome to the world of Federal FFP contracting.  It only works if you someone like say, Lockheed Martin. And have ten thousand projects.

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R.J. Schneider
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Yeah, thanks. It's probably a matter of scale. i know probably zero of the money end of surveying, but i thought that any line of credit or short term funding for a project would get more expensive, up against rate hikes and a locked in 6%. 

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