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Price a Construction Job
How do I price a Toronto job with Canadian markups and bond, and why does HST stay off the bid?
Build the take-off in Canadian dollars, then apply the app's Canadian markup template: general requirements, overhead, profit, insurance, bond and two contingencies, at your own percentages (CCDC 2 sets none). In the example about $2.4M of direct cost becomes just under $3.1M. HST stays off because a CCDC 2 stipulated price excludes value added taxes; the 13% HST is added when you bill.
Every bid on a Toronto job comes down to one number: your contract price, in Canadian dollars, with markups and bond, before HST. Price six stacked townhomes and turn their cost into that number.
In this video
- Add a line from the cost base and enter the quantity in the item's own unit. The rates are a starting point, not a Toronto quote.
- Apply the app's Canadian markup template in one click (your own percentages; CCDC 2 sets none): general requirements, overhead, profit, insurance, bond and two contingencies.
- Why a CCDC 2 stipulated price leaves the 13% HST off the bid, and why input tax credits keep your costs before HST.
- What the D-to-A class letter on the estimate means, and what it does not check.
- What the owner sees in the PDF, including the VAT line at zero.
You will produce
A Toronto bid price in Canadian dollars with Canadian markups and bond, stated before HST
Sources
Transcript
0:00 The price
Every bid on a Toronto job comes down to one number: your contract price. It's in Canadian dollars, it carries your markups and your bond, and it stops before HST. In this lesson you price six stacked townhomes and turn their cost into that number. Here is the plan. You add a line from the cost base and check its unit. You apply the Canadian markup template in one click and see what each line adds. Then you see why HST stays off the bid, what the class letter on the estimate means, and what the owner gets in the PDF. Pricing a job takes more than one person. The estimator builds the take-off and adds the markups. Your subtrades send quotes for their packages, and tendering those is a lesson of its own. The project manager checks the price before it goes out. The owner gets one price, with HST kept separate.
0:51 The take-off
Here is the estimate for Leslieville Townhomes, in Canadian dollars, with one section per trade. When you create a project, pick the currency by hand, because choosing the region alone leaves it on euros. On a job like this, most of the bid is your subtrades' quotes, one line each. The cost base prices the rest, as a starting point. Only the exterior walls are still missing, so add them from the cost base. Click From Database. The first tab holds the cost base, in Canadian dollars. Search for plank cladding, and tick the frame wall. Under Add to, pick Wood Framing, then type the quantity in the item's own unit. It's priced per hundred square metres, so 480 square metres of wall is 4.8. Add it to the estimate. The line lands in Wood Framing with its rate and its total. These rates are a starting point to learn with. They are not a quote for Toronto today. Before a number leaves your office, check each rate against what your own crews really cost. Keep every cost before HST, because the HST you pay suppliers and subtrades comes back to you as input tax credits. With every trade in, the direct cost comes to about $2.4 million. That's what the work costs you, before any markup.
2:05 The markups
Now the markups. The app has a Canadian template with seven lines. General requirements, head office overhead, profit and insurance are each a share of the direct cost. The bond is priced here on the direct cost plus those four lines, and your surety sets the real premium. The two contingencies sit on direct cost too, so no profit is charged on money that may never be spent. Together, they add a little over 30%. Click Markups to jump to the markups panel, then open Apply Regional Template. The list covers dozens of countries. Scroll to the tile marked Canada and CCDC, and click it once. All seven lines appear together, and each one has its own switch. If the owner doesn't ask for a bond, switch that line off. Go down the list. Each line shows its percentage and its amount. The bond is the only one worked out on a running total, so it comes to a little more than 1% of the direct cost. At the foot, the grand total is just under $3.1 million. That's your bid price. There is no tax line under it, and that's deliberate. Here's why. A CCDC 2 stipulated price contract states the contract price without value added taxes. In Ontario, that tax is the 13% HST. It's shown as a separate amount, and the owner pays it on top of the price. So you bid the price before HST, and you add the HST when you bill each month.
3:31 Class and PDF
Below the markups, a card grades the estimate with a letter from D to A, the scale Canadian owners and cost consultants use. With 20 lines, this one is a C. Keep two things in mind. The title above the letter still names the American AACE system, and the app sets the letter by counting lines, not by looking at your drawings. Take the letter as a check on how complete the estimate is. Last, click Export and choose PDF. This is what the owner receives: the project, the sections, and a cost summary with every markup on its own line. There's also a line called VAT, set at zero. That's the app's generic label, and it stays at zero because HST goes on your invoices, not into the bid. The grand total is your price before HST. Lines from the cost base also list their resources, so look through the PDF before you send it. That's a Toronto bid from start to finish. Build the take-off, and check every rate against your own costs. Add the Canadian markups in one click, and switch off what the job doesn't need. Keep HST off the bid, and check the PDF before it goes out. OpenConstructionERP is free and open source, and it runs on your own server. There's no subscription and no per-seat licence. Download it and price your next Toronto job.
