What are the common general contractor fees in Utah?

Question

I'm trying to hire a general contractor for my renovation loan project, which is a small project (installing carpets, appliances, water heater, light fixtures and bath fixtures and few extra small items). One of the contractors added 20% contractor's fee in addition to all the supplies and labor. Is that standard here in Utah right now? Same fees for new construction and small reno projects?  I'm first time hiring a GC and I don't know what I probably should pay for this project and to know if i'm getting overcharged or not.

Adam Richins · Answer

FYI--remodel and renovation work has much more risk and nearly twice the labor as new construction of the same size. It is often double the markup of new construction although they will often bury it in a lump-sum bid rather than excite the prospective client with a disclosed large percentage.  20 percent is probably a pretty fair rate if they show up, do what they say, and pay their bills.

Adam Richins · Answer

There is no standard. Generally small projects will have a higher markup for overhead and profit because they are relatively time consuming and much less efficient than bigger projects.  A $200 project with 20% markup wouldn't cover gas and paperwork.  Conversely, a 200k project @ 20% markup may be pretty normal for a higher end contractor. Remember they are running a business with a lot more expenses than yours. (License, insurance,  payroll, accounts payable, marketing,  sales, equipment, vehicles, etc.) They have to account for all of it before they even start breaking even, let alone make a profit or save for retirement.  Don't look at the markup percentage, look at the scope of work compared to the total project cost. If you get another bid are the totals ballpark with each other? If so, you are looking at market rates--be they high or low.