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?
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
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.
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 ?
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%.