FRAMING · ENVELOPE AND STRUCTURE · FIXED BY STEP 04

Your plan price is locked and lumber reprices every week

You priced the plan off a March quote and you're still setting walls on that same plan in October at March money.

WHY IT'S A FRAMING PROBLEM

Framing is the trade whose material half is a traded commodity bought load by load across dozens of repeat starts on one locked price. Trades that buy fixtures or gear order once per job at a quoted price and take the hit once. You take the same hit twenty times on the same plan number and the contract never reopens.

WHAT IT COSTS

The size of it

A 10 percent run across lumber and OSB in one season eats 5 to 6 points of contract value on a job bid at a 15 to 20 percent gross margin. By the twentieth house on that plan you're building at a loss and still booking revenue.

OVERHEAD AT $1M–$5M

13%

CFOS target 12% for framing.

GROSS MARGIN AT $1M–$5M

18%

CFOS target 22% for framing.

NET PROFIT AT $1M–$5M

CFOS target 10% for framing.

The lumber package is 50 to 60 percent of a material-and-labor framing number, and it moves every week while your plan price holds still for a season of starts. NAHB has framing lumber at $558.19 per MBF, up 2.1 percent in a month, with a 35.9 percent duty stack on Canadian softwood on top of that and open volatility from tariffs and supply bottlenecks. OSB sheathing runs its own cycle and swings harder than dimensional. The production builder's model is one fixed price per plan good for a year of starts, so escalation language gets refused as a matter of policy before anyone reads it. Every start after the first one moves against you, and you hold all of it.

WHAT TO DO

Three moves, in order

STEP 01

Break lumber, OSB, and fasteners out of the plan price in your estimate so the material half of the number can be tracked on its own.

STEP 02

Log the delivered price per MBF and per sheet on every load, tie it to the plan and lot, and chart it against the price you used at bid.

STEP 03

Bring the builder a written escalation trigger and a quarterly re-look on the plan price, since a flat annual number is what he will assume if you say nothing.

THE FIX

Step 04: Estimating system

The estimate maps one to one onto the job cost codes, so variance means something the day it appears.

CFOS-04 · CHAPTER 4

Make the estimate and the job cost report match

What this step changes, what it depends on, and how to tell it's installed.

BENCHMARKS

Framing by revenue band

All 7 bands are published. The CFOS target is beside the figure up to $10M to $25M, and the 4 bands above that are labelled modeled.

ACROSS EVERY TRADE

The estimate and the actual never match

You can compare the estimate to the job cost report, but the two use different words, so the comparison means nothing.

SAME TRADE

What else costs framing contractors money

FRAMING · CFOS-04

Nothing in your books turns hours back into square feet

You bid the plan by the square foot and pay the crew by the hour or by the unit, and nothing you own converts one into the other.

FRAMING · CFOS-06

Walls stack in four days. Trusses take eight weeks.

The deck is clean, the walls are plumb and braced, and eight guys are on it waiting for a girder truss somebody else was supposed to order.

FRAMING · CFOS-04

You inherit the slab and eat the shim labor

The slab is an inch and a half out of square, the concrete crew is gone and paid, and hiding it just became a framing expense.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

You bid cubic yards and pay by the ton

You bid 40,000 yards of import and every scale ticket comes back in tons. The biggest cost line on the job is measured in a unit your contract never defined.

CONCRETE

Your Ready-Mix Quote Expired Eleven Months Before the Pour

Concrete has about a 90-minute working life from batch to placement, so your supply market is a haul radius with two or three plants. They quoted a market that's gone.

DEMOLITION

Your Bid Locked A Scrap Price The Market Never Honored

You priced the steel credit in February and crossed the scale in October. The market moved and the subcontract had no escalation language for it.

QUESTIONS

What framing owners ask

How do framers handle lumber price increases on fixed plan pricing?

You priced the plan off a March quote and you're still setting walls on that same plan in October at March money.

What does it cost?

What do I do first?

Break lumber, OSB, and fasteners out of the plan price in your estimate so the material half of the number can be tracked on its own.

What are framing contractors supposed to be making?

Framing runs 18% gross margin, 13% overhead and 5% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 2 points below it. The CFOS target is 10%.

Which part of the system fixes it?

The step is number 04, estimating system. The estimate maps one to one onto the job cost codes, so variance means something the day it appears. It comes from chapter 4 of CONTROL: The Construction Financial Operating System.

OR HAVE IT HANDLED

Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for framing contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for framing contractors

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Wrote CONTROL, the 8 step system behind these figures. More about the author.