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For repeat clients, especially friends, Mike McCutcheon of McCutcheon Construction in Berkeley, Calif., makes an extra effort to accommodate their needs. When psychologist Luli Emmons and landscaper Frank Graetch came to him in 2003 with ideas for a kitchen remodel that cost more than they wanted to spend, McCutcheon proposed a solution: time-and-materials pricing.
"When we have an owner who's really trying to save and wants to do as much of the work themselves as possible, that's one of the cases when time-and-materials makes a lot of sense," says McCutcheon. While his company does both fixed-price and cost-plus jobs, he says fixed-price doesn't always fly in the San Francisco Bay area.
"These people are highly educated, super-consumer types," he explains. "They want to know the details. They want to get involved. Our systems lend themselves to that kind of clientele."
Emmons and Graetch had hired McCutcheon several years earlier for a bathroom remodel on their 1948 split-level Colonial and had wanted to redo their kitchen since moving into the home in 1985. The drawings and elevations they brought to McCutcheon, created with the help of several family members and friends who are architects, showed a kitchen that McCutcheon estimated at approximately $100,000, fixed-cost.
The clients wanted to bring the price down by $20,000 to $30,000. McCutcheon proposed a T&M approach and letting Graetch do some of the work and provide some of the materials. McCutcheon Construction's employees were familiar with Graetch's landscape contracting work, which made it easier for McCutcheon to give up some control.
"It took a lot of mutual trust," Emmons says. "Michael was willing at every stage of the process to work with us and decide if we could do it, and then bring down the price. He was very considerate of our needs."
McCutcheon and production manager Bill Lowe assigned project manager Rik Pickrell to the job. "Time-and-materials jobs depend on people who can move to be really successful," Lowe explains. With 20 years' experience at McCutcheon Construction, Pickrell had the speed and skills to keep the job moving without using subcontractors for much of the work.
The construction contract was signed and the permit was pulled in mid-March. Construction started April 2, 2003. Lowe says speed to production is one advantage of a T&M project. "There's more goodwill, more faith about things being done aboveboard."
Graetch did most of the demolition, as well as cleanup, dust protection, insulation and painting. He and Emmons purchased lighting fixtures, plumbing fixtures and appliances. Graetch also helped assemble and install the cabinets, which came from Ikea. Some of the money saved on the product went toward labor, though, to reinforce the cabinets. For instance, Pickrell added an angle iron across the base cabinet to help support the heavy sink.
Pickrell came to the site daily, and Lowe visited weekly to meet with the clients. Each meeting included a review of the budget and schedule to ensure that costs didn't creep out of control.
"There was no stress in this whole experience," Emmons says. "It was so much fun."
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Using time-and-materials pricing can save repeat clients money