Case Study / Rooftop Terrace
Why an NYC fund manager chose a Bolster Bid over a lower one.
Bolster Contractor Aaron Borenstein was bidding on a high-end rooftop terrace renovation in Battery Park City against a general contractor who had worked in the building for the past decade. Aaron's bid was 21% higher than the competition’s, and given the scientific and transparent nature of Bolster's Pricing Process, the owner, an NYC hedge fund manager, chose to investigate why. Here is what they discovered about Bolster Bids:
Bolster Bids are comprehensive and designed to fit your budget
Bolster's Project-Level and Task-Level Budget Reports show you early in the pricing process what your scope of work will cost. By following a transparent, data-driven approach, you won't get sticker stock when you receive a Final Bid, or spend on design fees for a project that turns out to be over your budget.
When a Battery Park City homeowner and successful hedge fund manager decided to renovate his 1,130-square foot rooftop space, he approached Bolster, as well as his building's in-house contractor, whom he had known for years and came highly recommended. His building's contractor, claimed it could deliver the project 2.17 times faster than Bolster Contractor Aaron Borenstein, while using only 17% of the resources. The homeowner was curious as to why there was such a dramatic difference between the two, and decided to educate himself about how the business of bidding works.
He found that from the start, Bolster followed a thorough and data-driven process in order to create its bid, beginning by visiting his rooftop to estimate a price range from which to plan. With the help of the Bolster App, which uses an algorithm to deliver a statistically accurate projection of project costs, Bolster Professionals were then able to provide the homeowner with the minimum and maximum possible figures for his renovation.
In many renovations, homeowners are in the dark when it comes to analyzing bids, architects find it a challenge to design to budgets, and contractors, aware that the key driver for homeowners is price, may underestimate how much projects cost. This can result in delays, cost overruns, and expensive re-designs--all of which Bolster's approach helps homeowners to avoid.
The homeowner found Bolster's project-level budget report reasonable, so the next step was to develop a more in-depth look at what the work would entail. Bolster Professionals met with the homeowner to prioritize the scope of the rooftop renovation, providing minimum and maximum figures for each task, as well as for all the materials needed for the project.
Even at this early stage, the homeowner was able to conceptualize the renovation in its totality. And as the design unfolded, new cost information was added to the report, eliminating the potential for sticker shock and allowing the homeowner to re-prioritize goals and remove items that would put the project above his maximum budget.
- Cost: Project-Level Budget Report was FREE. Task-Level Budget Report cost $3,500 and comes with Architect's Sketches.
Bolster Bids are structured to minimize your financial risk
Alongside your Final Bid you receive a Project Risk Report quantifying your financial risk of hiring a typical GC, a Bolster GC, and a Bolster GC with the Bolster Financial Guarantee.
When a Bolster contractor presents a bid, they present the ceiling, the maximum amount homeowners will pay for their projects. The typical contractor, on the other hand, presents homeowners the floor--the very lowest the project might cost--in order to have an edge over competitors. This is an approach that can jeopardize renovations, as once they are underway, contractors who have underestimated costs might then start submitting change orders to make up for their initial low-balling. Even worse, if a homeowner can't or won't pay the additional fees, the contractor's business could go under. One in ten contractors in NYC see their businesses fail each year--and when that happens, they invariably take several homeowner's deposits with them.
In this case, the competing general contractor's bid was missing important information, because he presented the floor to win the job. Without any explicit calculations of the time-based management resources required for the rooftop renovation, the competing contractor claimed it would deliver the project 2.17 times faster than Bolster Contractor Aaron Borenstein, while using only 17% of the resources.
On the surface, a faster, cheaper bid sounds appealing, but after thorough consideration of the risk report, the homeowner opted for Bolster. He made this seemingly counter-intuitive decision because Aaron's bid was complete: it presented the project ceiling and offered a financial guarantee to ensure that there would be no cost overruns.
Based on Bolster's data-driven projections of the project costs, which included each task as well as insurance fees, it's highly unlikely that the competing contractor would have been able to deliver the project at the price it presented in its bid--and it would have likely required about 142 days to deliver, not the 30 it forecast. In fact, at the low price, high speed, and minimal human resources he forecast, the competing contractor was putting himself at risk for bankruptcy.
To test the veracity of the competing contractor's bid, the homeowner asked them to provide the same financial guarantee as Bolster, but they were unwilling or unable to do so. Going with the more "expensive" contractor, then, was a much safer decision--one that resulted in a beautiful end product, and a very happy client.
Cost: Final Build Proposal was FREE with Design Services (otherwise the cost is $1,000). Project Risk Report was FREE with Final Bid.
Bolster Bids represent the maximum amount you'll pay
Bolster Bids are Financially Guaranteed not to go over budget and can be shared with competing contractors to get like-for-like pricing and similar assurances.
Through the Bolster app, contractors present owners with a Final Build Proposal that is both backed by leading insurers through our Financial Guarantee and can be shared with competing contractors to ensure like-for-like pricing. Typically, the variance between Bolster's and other contractors' bids is 14 percent--until the bid is shared, at which point competing contractors increase their estimates until there's only a 2 percent difference in price.
This demonstrates that traditional contractors may not know the true time-based resources required to deliver their bid successfully. Many, for instance, fold their site and project management costs (the work required to coordinate the project, deliveries, and installations) into their direct costs (materials and fixtures.) The average contractor, then, is padding direct costs to create the impression that you're getting more--so how can you be sure they know how to calculate their resources correctly?
A Bolster bid, by contrast, presents the raw direct costs, padding-free, with overhead presented separately and calculated according to market rates.
Cost: Financial Guarantee was available for $14,948 (5% of the project's subtotal).