💵 Module 6: Pricing Plumbing Jobs & Bidding
Turn your takeoff into a winning number. Stack costs correctly, apply markup vs. margin the right way, structure alternates and unit prices, and package a proposal that passes compliance checks the first time.
📘 Overview
In Module 6 you’ll convert material and labor into a price the client can approve. We’ll stack direct cost → overhead → profit, distinguish markup vs. margin, apply contingency, and build bid forms with unit prices, alternates, and allowances. Finish with a clean proposal, compliance checklist, and submission routine.
🎯 Learning Objectives
- Assemble a complete estimate from Module 4–5 outputs (BOM + Labor Summary).
- Apply overhead, contingency, and profit in the correct order.
- Use margin when you’re targeting a price outcome; use markup when building off cost.
- Prepare unit prices, alternates, and allowances without double counting.
- Produce a compliant proposal package and bid form submission.
1) Direct Cost (DC)
Materials (landed), labor (with burden), equipment, permits/fees, subs.
2) Contingency
Buffer for unknowns (5–15%) tied to scope risk, not blanket markup. Keep separate.
3) Overhead (OH)
Allocate company overhead (10–15% typical) or project OH (PM, safety, mobilizations).
4) Profit (Margin Target)
Margin = Profit ÷ Price. If you target 12% margin, compute price accordingly (see formulas).
🔍 Markup vs. Margin (Know the Difference)
- Markup applies to cost: Price = Cost × (1 + Markup).
- Margin is profit as a share of price: Margin = (Price − Cost) ÷ Price.
- To hit a target margin, use: Price = Cost ÷ (1 − Margin).
Example: DC = $100,000; Contingency = 10%; Overhead = 12%; Target Margin = 12%
- DC with Contingency: 100,000 × 1.10 = $110,000
- Add Overhead: 110,000 × 1.12 = $123,200
- Price @ 12% margin: 123,200 ÷ (1 − 0.12) = $140,000 (Profit ≈ $16,800)
Note: If you used a 12% markup instead, price would be 123,200 × 1.12 = $138,?84 (lower profit). Margin and markup are not the same.
Unit Prices
Price adds/deducts for typical changes (e.g., extra 4" core drill, fixture add). Keep units measurable and verifiable.
Alternates
Separate scope/prices (e.g., upgrade fixtures, change pipe type). Clarify inclusions to avoid double count.
Allowances
Owner-controlled budgets for yet-to-be-selected items (e.g., fixture trims). State what’s included (material, tax, freight, labor?).
✅ Bid Review Checklist (Last Look)
- Math audit: totals tie to bid form; alternates isolated; unit prices filled.
- Quotes current (valid through bid date) and properly leveled; lead times noted.
- Sales/use tax, freight, shop fab, permits/fees included.
- Clarifications, inclusions/exclusions, and schedule assumptions explicit.
- Compliance: insurance, bonding, licensing, prevailing wage if required.
- Submission method correct (portal/email/hardcopy) and time-stamped.
🚫 Common Pricing Mistakes
- Using markup when a margin target was requested.
- Blending contingency into profit (hides risk; hard to manage later).
- Double-counting freight/tax in both quotes and your adders.
- Missing smalls (hangers, primers, sleeves), permits, or testing fees.
📂 Module 6 Downloads & Templates
Copy from the blocks below and save as CSV/TXT for use in sheets or estimating software.
🧮 Pricing Stack Calculator (CSV)
Label,Value,Formula/Notes Direct Cost (DC),, Contingency %,10%, DC + Contingency,,"=DC*(1+Cont%)" Overhead %,12%, Subtotal w/ OH,,"=(DC*(1+Cont%))*(1+OH%)" Target Margin %,12%, Final Price,,"=Subtotal/(1-TargetMargin%)" Profit $,,"=FinalPrice-Subtotal"
🧱 Unit Price Schedule (CSV)
Item,Unit,Unit Price,Notes Core Drill 4",EA,, Add WC Fixture (complete),EA,, Add 1" Cu Press (installed),LF,, Remove/Reinstall Ceiling Tile,SF,, Sawcut & Patch Slab (4"),LF,,
🔁 Alternate Pricing Log (CSV)
Alt #,Description,Add/Deduct,$,Includes,Excludes,Notes ALT-1,Upgrade Fixtures to Spec B,Add,,,, ALT-2,Replace Cu with PEX in Areas 2-3,Deduct,,,, ALT-3,Insulation Thickness Increase,Add,,,,
💳 Allowances Register (CSV)
Item,Amount,Includes,Owner-Directed?,Drawdown Rules,Notes Fixture Trim Allowance,$,Material+Tax+Freight,Yes,CO for overage, Specialty Valves,$,Material only,No,Unused reverts to Owner, Shutdown Support,$,Labor OT window,No,Preapproved windows,
📑 ITB/RFP Compliance Matrix (CSV)
Requirement,Doc Ref,Included (Y/N),Notes Bid Form complete & signed,,, Bonding (Bid/Perf/Pay) if required,,, Insurance limits & endorsements,,, Prevailing Wage / Certified Payroll,,, Subcontractor List (if req'd),,,
✉️ Proposal Letter Template (Copy/Paste)
Subject: Proposal – Plumbing Scope for [Project Name] We propose to furnish and install the plumbing scope per drawings/specs, addenda [#], and our clarifications herein. Base Bid: $[Amount] (excludes alternates) Alternates: [List Add/Deduct with $] Allowances: [List items & $] – Owner-directed drawdown Unit Prices: [Attach schedule] Schedule: [Duration/constraints] Clarifications/Exclusions: [Bullet list] Quote Validity: [Date] Thank you for the opportunity. [Signature block]
📝 Clarifications & Exclusions (Copy/Paste)
• Pricing based on normal access (≤10' AFF) and standard shifts unless noted. • Sales/use tax and freight included; permits & utility fees included/excluded as noted. • Submittals, O&M, as-builts included; commissioning support (X) hours; additional by CO. • Firestopping by [us/others]; roofing patches by [us/others] per spec. • No hazardous materials handling unless specifically noted in scope.
🧪 Practice Exercise (45–60 min)
- Combine your Module 4 BOM and Module 5 Labor Summary → set Direct Cost.
- Apply the Pricing Stack Calculator to add contingency, overhead, and target margin.
- Build a Unit Price Schedule for three common changes in the project.
- Fill the Alternate Log with at least one add and one deduct scenario.
- Complete the Compliance Matrix and create a final PDF proposal using the template.
👩🏫 Teacher Notes (Facilitation Guide)
- Mini-lesson (10 min): Walk through markup vs. margin with the example.
- Workshop (20–25 min): Teams build a price targeting a 12% margin and compare to 12% markup.
- Apply (10–15 min): Create two unit prices and one alternate; peer review for clarity.
- Debrief (5 min): Share top compliance pitfalls and how to avoid rejection.