This is the rough in. Materials are currently 25% of the costs.

This depends entirely on where you live. We are in Northern California, where your original quote would be crazy low and even with the extra $15K would be a bargain for a space that big. But if you’re elsewhere in the country, that might be the going rate. Have they given you information on why the costs have gone up (unexpected issues, etc etc.)? Do you have a contract outlining cost and scope?

No issues. Everything was solid and we combined 2 bathrooms so there was plumbing lines everywhere. I guess 55k is the going rate for a bathroom now. Just seems high- even with inflation. Sounds like the cost issues are with the sub contractors, especially the tiling.

A primary bath starts at 60k. Combing two baths into one means all the plumbing was replaced. Your contractor was at fault for not preparing you on the front end.

Thanks that is helpful. The main partner in the company is an architect by trade. We paid him for design renderings just for that reason. We thought by having him design and then contract that all parties would know what the scope was to be. In the course of the rough in there were no surprises and with the combination of the 2 bathrooms plumbing lines were already there to take advantage of. I guess we just are wondering if we are the $&€# for insisting on a ceiling for the budget, or if this is just to be expected now. There is no question on the quality of the team but they clearly can’t manage cost on their end either, so it comes to who is to pay for it.
Thanks all great questions for us to consider.

What type of contract do you have? A ”fixed cost”? Or a Cost Plus? What were the up front specifications? Was there a table with them

listed and costs? What changes were made to those specifications, besides the standard manufacturer materials cost increases over time? What changes were made with the scope of work? What unknown conditions impacted that?

There is absolutely no "going rate" for a bathroom remodel for you to compare to. The cost is completely dependent on your specific existing conditions, the design and level of the bathroom you choose to remodel it into, and the contractor(s) you have chosen at that point in time.

What this situation is dependent on is your contract. If you had 100% Construction Documents and Specifications prepared, with no changes for existing conditions or design, and a fixed fee, then asking for more money halfway through a project is blackmail. If this is all in-house Design/Build (nuanced by the architect on staff), then they have failed with their initial construction estimate and the cost increase halfway through a project is part of their business model (aka highway robbery).

Kinda what we are thinking. The contract is a cost + 15% overhead. So every time there is a quote higher than expected they are still making a profit on it. We bought materials but there was never any guidance to say - we own 30% of the total budget for hardware and they have the other 70%. We have been communicating frequently (too much for their liking) on where we are heading, we put everything in a spreadsheet for them and in the course of doing that we identified another 5-7k in expenses that we haven’t even discussed yet. Given that we are already at 47k we can only assume there is a lot more to come. Nothing should be a surprise now, all trades have been in the house, so why can we not get a ceiling at this point? So frustrating. But thanks for the support. Lots of learning for future users looking for things to avoid when starting a major project like this.

My project was just major bathroom gut, not work throughout the house. My contractor gave me a detailed estimate with allowances. So it was clear to me when I was picking out materials whether I was adding to the total bill or not. The allowances were low for what I wanted, so my total project price increased in line with those selections. Other than that, we had one small change order that was a couple hundred bucks and the final bill from the electricians was for some reason $750 higher. But basically no surprises because we did all the selections up front and had a clear estimate. You do need a real deal estimate of that level to avoid surprises, but that seems relatively uncommon in my experience.

I did a gut remodel including a master bath and your contract seems odd in terms of not having a final budget before you started - at least for those items that are controlled by the GC and not finishes selected by the homeowner.

When I remodeled, the costs were a combination - some stuff like rough plumbing or tile installation etc. was a line item based on the "costs" plus the GC's agreed upon markup. I had no interest in knowing what he paid his workers or for the materials used but it appeared as a line item as a cost.

Other stuff I selected such as the tile, the marble, the fixtures and these were paid by me and were noted as an item to be supplied by me. The GC had been supplied with specifications by my designer so that he knew what kind of materials would be used in terms of impacting the costs.

Along the way there were changes that resulted in more expenses - some where because I had decided I wanted to upgrade - for example the shower doors were a line item supplied by GC according to specifications but I decided I wanted Showerguard so that was an additional expense. Other examples were unexpected like needing a new electrical panel because of greater electrical needs for kitchen appliances and of course I paid for those as well since they were outside the scope of the original electrical specifications and scope.

A cost plus contract puts the cost control onus on the homeowner, and their design professional much more than on the contractor. The project’s good faith estimate relies on the cost parameters established by all of the preliminary design work to create the Scope of Work and Materials List, and then the labor estimating work of the chosen contractor referencing the design work.

Whether your plumbing fixtures for the bath are 3K or 13K for the totals, if the manufacturer discontinued them before you can order, you still have an idea of the pricing that you should try to account for when researching replacements. You may not account for the extra design hours for the designer who has to now regroup for an appropriate replacement, but this is why a contingency amount in the budget is important.

The bigger unknowns in remodels has more often been the Scope of Work changes, due to hidden conditions. Older homes are notorious for the cast iron waste pipe disintegrating when touched. Or a main joist having been cut be a previous plumber and now needing structural reinforcement. Those are understandable changes and price increases.

From your description, I’m having trouble understanding if your cost overruns are from the product end, or the work end. Or both. Any why? Were the original labor quotes from so long ago that the costs have gone up that much? I can understand some of that. Electrical raw materials have risen hugely. Many subs won’t even guarantee a quote to be held past 14 days!

"The contract is a cost + 15% overhead. So every time there is a quote higher than expected they are still making a profit on it."

What this is saying is you didn't have hard bids before starting. This method is for Design/Build - when you start construction prior to 100% final design and specs - so you can only do an estimate on the initial scope. For a small bathroom remodel, there is no reason a Design/Build method should be taken, as everything can be designed and spec'd ahead of time (unforseen notwithstanding) and bids obtained on that.

I agree which is why we contracted and paid for the design from the architect and general partner of the team. We have made no changes to the original scope nor have there been unforeseen structural issues as we went through the demo and rough in.
Our sense is that they don’t have their own team or have over committed to other projects and are now left with the subs who can demand what they want for the job because they have other business.
We did do some due diligence up front and asked if they had their own team or if they worked through sun contract - which is a risk and we were told they had a steady team on the jobs they have. In the course of the month they have lost folks (as we know is a reality right now) but it shouldn’t be our fault that they can’t keep a crew at a cost that we expected. Not sure who has an extra 45% to add to a quote but yet here we are.
We are just trying to do small steps now to not escalate the situation but also make sure we don’t over pay and leave ourselves exposed if things come to a halt.

It boils down to your contract and what it says regarding the price to do work, which sounds like there wasn't one defined. I would love to have jobs that I sign a contract to perform work, yet have an open-ended reimbursement. Even my T&M's have caps. Heck, if that's how I wanted to do business, I could even get subs to give me an invoice for whatever I want it to say.