No. You should never see his fee. He will sub the main jobs out and will fund from the projects completion.
It depends on the standard practice of your area. In NYC it is common. Some contractors build in a percentage on each of the trades amounts and do not reveal that amount.
Whether it is under a category labeled General Conditions, Management & Supervision or Overhead and Profit, it is my opinion that a General Contractor should be transparent with their fee. GC’s are probably the most important asset of a renovation since they are the “producers”, the liaison between the owners and workers. A good GC is the moving force of a renovation and there is no reason to hide their share.
Fact is that if a Company is in business then they need to make money to stay in business. If someone is spending their time getting quotes, scheduling people, making sure that their sub contractors finish a job so as to not delay a project, then they should get paid for their work. If they don’t then why would someone do that type of work?
There are definitely different ways of handling costs, but hiding them is not one that we subscribe to. I know lots of contractors that do not want to show what they make on a job (keep in mind “make” covers S(ales), G(eneral) and A(dministrative) costs to keep the business a viable ongoing concern.
Our most successful (and complicated) projects have been one’s where all fees are transparent, including a fee based on the overall costs of the project. While a customer could look it as an added cost, if they do not see that the added cost insures quality and value in time to completion then one may need to look at the overall project.
If there is concern that a contractor is paying less than what he/she is telling you things cost, then why not require copies of all invoices for subcontractors?!
It’s pretty common. The budget lays out the pricing for each sub and then the management fee for the project. It’s a transparent way of showing to the client how the project amount is broken down.
There are 2 types of contracts or bidding methods, 1. is ‘lump sum’ when all is included, and 2. cost plus, where you see cost per trade plus a certain percentage for profit and overhead.
While it is common and entirely based on preference, I rather not include the fee because it opens up for conversation and negotiations. Profit should never be stated.