It depends on how your contractor handles change orders. If your allowances are low and you upgrade and that is considered a change order some contractors will charge you their percentage on that upgrade plus a fee to change the contract allowance or price. It ends up costing more than if you just had put in a reasonable allowance and paid their percentage on that in the beginning. Having said that, could you negotiate a 'fee' based on the scope of work and not a percentage of the total project? You have already seen some numbers from these builders, you could ask: "Would you consider building my home for this amount as a set price even if the total house cost was '$' due to upgrades or things that were not factored into your bid that we asked for?" Personally I would try very hard to make as many of my design choices ahead of time as possible so that your allowances would cover them or that they could just be specified as part of the contracted price.
Hope that helps!

I'm not exactly sure, but I THINK, depending on the contract with your builder, that as you make selections for the things which you have set allowances for, that your GC's fee will adjust accordingly. For example (I'm using round numbers for illustration), if you have a $10K appliance allowance and your GC gets 10%, in the initial bid, he will get $1000. However, when you actually purchase your appliances and they come in at $9K, you will only owe him $900. Vice versus if you blow your appliance allowance and spend $15K.

You had posted an earlier message that asked about fixed price vs. cost plus so I am assuming that you have not necessarily made up your mind as to which direction you are going yet. However, it sounds as if your bids are based on a cost plus basis (based on your statement about the increase to the bottom line affecting management fees). Neither way is more correct than the other, but if you are going cost plus then the builder should be able to increase his fees based on the increased amount rather than the original bid.
If you want my honest opinion, if you are going to base the decision of which builder to choose from an incomplete bid ("Both builders put rough prices in for things like trim (based soley on the linear feet of trim they would need and not on what style we would pick), electric (based on the average number of outlets/switches that most people use)etc. Both builders left off various items that we requested"), you are asking for a lot of trouble throughout the building process. You are much better off spec'ing everything COMPLETELY upfront and insisting those specs be part of the contract documents than allowing things to be left off just to save money from the management fees. How will you have any real idea what the project will cost? How will you be able to point to the contract/specs/plans and say "build it as spec'd in the contract?" Trust me, you do not want to give up this control in the building process. Trim work costs can vary greatly depending on style, outlet costs and fixtures can vary greatly depending on number, and on and on. I've said this before, but our spec sheet was enormous...many, many pages, and it was not detailed enough! Good Luck...I think you need to get more accurate bids.

One of the builders did say he does not adjust it up, therefore I can be sure he doesn't adjust it down!! The other I do not know yet.

Great point dixiedoodle. My understanding is that once you decide on a builder, then they pull out the spec sheets and fill it all in before you sign. You can always back out, but they don't put that time and energy into things unless you are REALLLLLLY serious about them building the house. I do have a personal preference on which builder I think I would work best with and I also studied both bids enough to know what was left out and what quality level was assumed to have a good idea that they would be close on price. There are certain areas I think they have too much padding (different areas for each builder). So, I will definately get a completed spec (they have seen my eight page draft) and get a price before signing a contract. (I am leaning towards fixed price so I don't have to stress about it, but I don't know much about cost plus yet).

It sounds like I am right in assuming that their management fees will change. I understand that if I add an extra bathroom, they would charge more (including their fee). Weird that they had items that they didn't base their fee on (septic) because at this point they have an estimate and not a fixed price. Does that make sense? Maybe they just wanted their number to look lower now and planned all along to raise it later.