Are you saving a buck ? (the skinny on “Owner-Provided” items)

Many savvy owners know that General Contractors (GC) markup materials, fixtures and their subcontractors work. Accordingly, the owner wants to bypass this markup (often >10%) and provide the items themselves.  The savings can be substantial and “points” earned on your credit card  can mean airline tickets in a shorter time.  BUT, what many owners fail to account for is that there is more to it than a few mouse clicks and whipping out the credit card.

For example, ordering a Bathroom-worth of materials is often 30-50 separate items, when one accounts for the tiles, plumbing fixtures, lighting, toilet accessories, etc.  These items must get from the distributor to the job site in a logical order, must be properly selected, and be fully compatible with adjoining materials. Even with a good set of drawings, the owner has to be a good shopper, fully familiar with the characteristics of the product and hopefully knowledgeable of the construction sequence so the products get there in time, but not too early at the risk of damage or hindrance….or at least have a knowledgeable salesperson assist them.

The most common items that Owners tend to buy are kitchen appliances, decorative lights (like sconces), toilet accessories such as towel bars, kitchen cabinets, ceramic tile, counter-tops, carpeting, special hardware, audio-visual and security items. Some owners will also have selected subcontractors engaged to work with the General Contractors also in an effort to minimize markups.

The down-side to using this strategy:

-Is that often times Owner-provided items are ordered incorrectly or improperly scheduled for delivery -creating delays and possible claims against the owner by the GC.

-It takes a lot of time to do the purchasing, and the learning curve is steep -be realistic about your time, patience vs rewards.

-Also be aware, that using subcontractors that are not part of the GC’s usual team can sometime lead to mayhem as the players are not accustomed one another’s pace and methods.

-GC’s usually have better trade discounts than the owner, and will tend to pass on most of the discount to the owner

-Additionally the owner, while paying for the subcontractor directly, may not be as infuential as they believe-because the GC see’s the subcontractor as part of their team and will provide them with more future work and incentives that the owner.

Please call us to review your project and see where it’s feasible to use the “Owner-Provided” items…914 674 2950.