Septic systems: maximizing profit of your job

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You can lose a tremendous amount of money if you are not prepared to deal with septic systems. You could bid a job thinking that a simple septic system is going to cost around $4000 and then find out that a total cost of $10,000 is needed to install a suitable system. Can you afford a $10,000 loss? I surely can’t.

Septic systems all perform similar functions, but not all systems are the same. In fact, many variations are possible with septic systems. Some are made mostly of gravel-and-pipe, along with concrete tanks. Other systems, which use chambers, are much more expensive. Occasionally, pumps are needed for septic systems. Pumps can really run the cost up. To be protected from financial losses, you need to have a good working knowledge of septic systems.

As a plumber, I might be able to take advantage of you on a pump system. At my best, or worse (depending upon your perspective), I can only take you for a few hundred dollars if I abuse my professional knowledge and sell you a pump system. Septic systems cost much more than pump systems, so it’s possible to cheat you out of a lot more money.

If you deal with septic installers while you are ignorant of septic issues, you are taking some huge chances. You owe it to yourself to become knowledgeable about septic installations. This hook gives you the data that’s needed to make you a savvy contractor.

Private sewage disposal

Private sewage disposal is often a factor in the construction of rural homes. Sewage disposal can be a volatile part of the job. Septic systems, when required, are a major part of a home’s construction. A home can’t be occupied unless it has a satisfactory septic system. As a builder, you must be aware of local requirements pertaining to septic systems.

When a person calls you to build a custom home that requires a septic system, you must be prepared to bid such a job. If you are a spec builder, you probably buy building lots either on your own or with the help of a real estate broker. When buying land, septic systems can be a deciding factor. How much do you know about soils studies and septic systems? If you don’t know a lot about them, don’t feel bad. Many builders don’t know much about the inner workings of septic systems. However, if you don’t know a good bit about septic systems, you should strive to learn about them. I assume you are doing that, since you are reading this guide. Congratulations, you’re on the right path to protecting yourself from financial losses.

Preliminary soils studies

Preliminary soils studies should always be done prior to purchasing a piece of land that requires a septic system. Most builders are aware of this, but some people new to the building business are not. Even experienced builders sometimes neglect the investigation of land before making a purchase. This is a big mistake. If you fail to take the proper precautions when buying land, you could wind up with a lot that's not buildable.

If you are bidding the construction of a new home, you should require an approved septic design before giving any prices. Without this design, you can’t possibly bid a job properly.

Before purchasing land, spec builders should require at least a soils study. A soils design is safer and better, but a design is also more expensive than a study. But, wouldn’t you rather pay a couple hundred dollars for a septic design to ensure that a lot is buildable, rather than gamble with the purchase of land at a cost of thousands of dollars? The answer seems simple enough, but some builders don’t spend the time or money to properly check land. Hopefully, you’re not one of these builders.

A septic design

Once you have an approved septic design, you are on much safer ground. Professional septic designs detail all aspects of a septic system. From a design, you can see what size septic tanks are required. The size and type of stone is specified. A piping layout is provided. Until you have an approved design, you can’t accurately bid a septic system.

Septic subcontractors

Septic subcontractors often do more than just install septic systems. A majority of site contractors install septic systems. It’s not uncommon to find that the contractor who clears, excavates, and grades your lot also installs the septic system.

Some septic contractors can guesstimate the cost of a septic system with amazing accuracy. But, they can’t pinpoint the exact cost without an approved septic design. You are going to need a septic design before you can build a septic system, so you might as well get one early enough to save yourself the pain of buying an unbuildable lot. By the way, you need an approved septic design in order to get a septic permit, so there is really no way to avoid the cost of a design.

Types of septic systems

Several types of septic systems can be designed and installed. The most common type, and the least expensive, is a pipe-and-gravel system. The drain field on this type of system is made mostly with crushed stone and inexpensive perforated pipe. While these systems are not cheap, they are much less expensive than some other types.

Not all land can accommodate a pipe-and-gravel system. If the soil is not capable of absorbing the effluent from a septic tank quickly enough, a pipe-and-gravel system won’t work. Only the best soil conditions are suitable for the least expensive septic systems. Luckily, pipe-and-gravel systems can be used at a whole lot of building spots.

As a spec builder; you can make more money if you find land where a simple septic system can be used. The difference in cost between a simple system and some of the more complex systems can exceed $6000. If you have a choice of two lots, both priced the same, and one requires a complex system while the other needs only a simple system, the septic difference can mean the equivalent of a nice discount.

Chamber systems:

Chamber systems are more complicated septic systems. Chamber systems are used when soils can’t absorb liquids quickly. The cost of a chamber system can be extremely high. If a job requires a chamber system, and you walk into it without knowing the chambers are needed, you arc going to learn a costly lesson.

Pump systems:

Pump systems are another expensive form of septic systems. If you have to combine a chamber system with a pump system, you are looking at big bucks. Can you imagine bidding a job for a $4000 pipe- and -gravel system only to find out that the job requires a $12,000 pump and chamber system? A mistake like that sends $8000 right down the drain, so to speak. You can’t afford this type of problem.

A pump system is needed when the septic tank or field has to be installed at a higher elevation than the sewer of a home. While these systems aren’t needed too often, they are not exactly rare. Every rural builder must be aware of pump systems.

As you move through sections that follow this one, you are going to find a tremendous amount of information about various types of septic systems. By reading these sections, you are going to be much better prepared for the real world of building houses with private sewage facilities.

You must be careful

You must be careful when working with septic systems. I’m not talking about the physical work, although safety on the job should al ways be a priority. The caution I refer to here has to do with money. When working with septic systems, you can lose big money in so many ways that you must take the time to protect yourself by building a paper shield. What’s a paper shield? It’s simply paperwork that puts all of your intentions and agreements in writing. If a job goes sour, this paperwork can save the day.

What could go wrong with something as simple as installing a septic system? Dozens of potential problems can affect a builder who is working with septic systems. Many of these problems are going to be covered in later sections, but, I’ll discuss some examples here.

Our first example:

Let’s say you are a builder who has dealt with septic systems in the past. While you don’t build a lot of houses that require septic systems, you have had some experience with private disposal projects. This profile makes you a high-risk builder. If you had never dealt with a septic system, you would probably approach a job that required one with caution. A builder who works with septic systems on most jobs would have enough experience to avoid a lot of problems. You hap pen to fall into a dangerous category. You’ve installed enough septic systems to feel comfortable with them, hut you really don’t have extensive experience. Let’s see what’s going to happen.

You’ve recently acquired a piece of land for the purpose of building a spec house. A soils test and design has been completed. It appears that you can use a cost-effective pipe-and-gravel system. With everything looking good, you proceed with your project.

After obtaining your septic permit, you have the septic site cleared. Once the site is cleared, your septic contractor begins to dig. After just a short distance into the ground, the digger finds underground water, something you weren’t expecting. A change in plans is in order. A mound system is required. Your building costs just shot way up. What went wrong?

When soils tests are done, the soil used for the tests is collected from random test holes or pits. Most people who do the tests use augers to get their test samples. Sometimes pits are dug with back- hoes, post-hole diggers, or shovels. In all cases, the holes are generally dug in various locations within the boundary of a proposed septic site. Since the holes are made at random, it’s possible for some thing like underground water to go unnoticed. The same could hap pen with a ridge of bedrock.

What can you do to protect yourself from this type of situation? It’s not feasible to dig trenches through a septic area to expose underground obstacles prior to buying a piece of land. You could dig additional test holes. Digging the holes in a pattern, such as an “X” pattern, might reveal trouble before it’s too late. Probing the ground with a probe rod could tip you to underground rock, but water would be more difficult to detect.

If you were building a home for a customer, you could make pro visions in your contract to protect you from underground obstacles. Such a provision won’t help a spec builder, but custom builders can write clauses into their contracts to limit their financial obligations when unexpected trouble is encountered.

I know that what we are talking about seems like a lot of extra work, but a lot of money is at stake. You don’t have to go to extremes to prevent septic troubles, but failure to do so can be expensive. Use your own judgment, but I advise you to take proper precautions.

Another example:

Let’s look at another example of how septic systems can go bad. Assume that you have a septic design where everything looks good. You begin your septic work, and then it happens. Your subcontractor hits solid rock in the location where the septic tank is supposed to be buried. You’ve got three options. First, find a new place for the septic tank, which we are going to assume you can’t do. Second, blast the bedrock to allow a deeper burial of a septic tank. Blasting could be done, but it’s expensive. Plus there is some risk that it could collapse the well on this property. Based on the risks and expense, you rule out blasting. This leaves you with the third, an only remaining option—a pump system. Well, you’re into an expensive problem.

What could you have done to prevent this problem? Some simple probing of the ground in the area of the proposed septic tank location would have revealed solid rock. Finding this rock early might have helped you prepare for your problem. Knowing that the rock exists is not a solution, but it could have made your work a little easier. At least you could have planned for better alternatives. If the rock was located soon enough, you might have avoided a pump system by making alterations to the foundation height of the house or to the exit location of the sewer. The point is this, preliminary research can’t change the facts, but it can make dealing with them less destructive.

One more example:

Let me give you one more example before moving on. In this scenario, you are a builder who is very experienced in the construction of homes where septic systems are installed. Your past experiences have taught you well. Based on your past history, you feel well qualified to bid jobs where septic systems are involved. Your comfort level might be a little too great.

In this example, you have been retained to build a large custom home. The house is going to contain five bedrooms. In your particular jurisdiction, the size of a septic system is determined by the number of bedrooms in a house. With a five-bedroom house, you are looking at a large septic system.

The house is on a pretty large lot. This is good, because the home is a large one. You get an approved septic permit and check it out carefully. Everything is in order, so you begin construction. This particular house has a three-bay, attached garage. shortly after the roof is on, your customer comes to you and requests some extra work. Being a smart builder, you treat this request just like you would a new job. You figure the cost of the work and put all the details in writing. The customers review your proposal for a change order and signs it. Your performance seems satisfactory, but is it?

The extra work you have been requested to do involves creating a mother-in-law addition over the large garage. In doing this, you are adding two bedrooms over the garage. At this point, you have not realized that you have put yourself into a bad situation.

Work continues on the project. Everything is going well. Before drywall is hung, you get all of your rough—in inspections. However, a question is raised by the plumbing inspector. The approved plans on file with the code office show five bedrooms. According to the approved plans, there is no living space above the garage. But, you have signed a change order to provide finished space in the attic of the garage.

When the plumbing inspector sees rough-ins for a kitchen and bathroom over the garage, red flags spring up. The inspector contacts the code office by radio to confirm the fixture count on your plumber’s permit. This leads to further investigation. It doesn’t take long for the code office to figure out that something is wrong.

When you go by your job late that afternoon to see if it passed its plumbing inspection, you find a stop-work order on the job. This puzzles you, but the code office has closed for the day. When you contact the code officer the next day, you find that you are shut down. The job has been judged to be out of compliance. Why? Because you didn’t take out additional permits to cover the work being done over the garage. You weren’t trying to cheat the system, you simply forgot to apply for additional permits. But, you’ve got a big problem on your hands.

You have agreed, in a written contract with your customers, to supply additional living space over the garage. All of a sudden, you can’t do this easily. It’s more than a matter of paying for permits and a penalty fee. Due to the extra bathrooms, the existing septic system is no longer large enough. You have to upgrade the entire septic system to accommodate the additional bedrooms. Who’s going to pay for this? I suspect that you are. Since you entered into a written agreement with your customers to give them extra space for a price, you have to stick to your promise.

Can you imagine how much it would cost to solve this problem? I can tell you that the expense would be significant. Could something like this really happen? It could. I know a builder who faced a very similar situation in my area. You can’t afford to fall into traps like this one. You can avoid this type of problem if you remain alert and pay attention to detail.

What could you have done to stay out of harm’s way in the above example? You should have known that adding bedrooms to a house would affect the size of a septic system. Being an experienced builder, OU should have also known that permits would have to be amended to allow for additional work. By following proper procedures, you could have avoided the financial losses I have just described. All of the details of the job should have been worked out before you committed to a price with your customers. Trust me, avoiding a problem like this one is well worth whatever time you invest.

Firm prices

The only safe way to arrange for the installation of a septic system is to get firm prices from septic contractors. Offering to work with a contractor on a time-and-material basis is very risky. This is true in most types of trade work. But, the potential for high cost overruns with septic systems makes a time-and-material basis especially risky.

I worked as a consultant for a building company a few years ago. The company retained me to help them get started in the business of building homes. The first house I sold for the company to build required a septic system. A mistake was made by the company when contractors were brought onto this job. For example, the site con tractor was allowed to work on a time-and-material basis. This con tractor was also the septic contractor. There were some good reasons, in the minds of others, for allowing this contractor to work without a firm, contract price.

The septic installer had plenty of experience in site and septic work. However, the contractor had just recently opened his own business. He said that he didn’t really know how to bid the job fairly, but that he needed the work and was willing to perform the needed services for a reasonable fee. The powers within the building company agreed to a time-and-material payment basis with the contractor. This fact served to hurt the contractor.

I was responsible for establishing this job. In doing so, I obtained site and septic prices from four local contractors. The prices varied substantially. Three out of the four contractors were well-established, reputable contractors. The bid prices seemed a little high to me, but all of the contractors had produced what I considered to be expensive bids. This encouraged me to seek other prices.

As I sought new contractors to bid the job, one of the carpenters suggested the contractor who wound up with the job. Based on recommendations from two trusted carpenters within our organization, a decision was made to award the job to the new kid on the block. This contractor would not have gotten the job without support from our carpenters.

Well, the site contractor did pretty good work. I’ve seen better, but his efforts were acceptable. What really went wrong was the cost of the work. By putting the contractor on a time-and-material basis, we basically gave him a blank check. I knew this was not a good idea, and I explained my fears to the people who had a vested interest in the building company. Based on their desires, I agreed to taking on the risk of a new contractor. It was a mistake.

The site and septic work on this job went on and on. Cost figures escalated. By the time the work was done, the total cost was higher than some of the bid prices from the other contractors. The building company would have been better off going with a fixed contract price. You live and learn, but the lessons can be costly. My advice to you is to only accept firm contract prices.

We’ve covered the basics on wells, pumps, and septic systems. Now it’s time to get into the nitty-gritty work. We are about to move from a broad-brush approach into specific facts and instructions. You might wish to acquire a notebook and a pencil. It can be to your ad vantage to take a few notes as you move through the following sections. At the very least, turn down the corners of any pages that you find particularly interesting. Now, let’s move on.

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Updated: Sunday, February 21, 2010 4:01