View Full Version : Lowballer? who knows?
CopperTone
09-02-2008, 08:01 PM
I thought I lowballed a job last week because we needed the work. I get the bid results - made me sick - and pissed at the same time . How can you win?
the results - obviously without knowing the scope of work- but here it is.
48K
72K
82K
103K
104K
I was the 72K - even if I tightened up my number even more - I could only take out maybe 4k-5k - that would be bare bones - and we better hustle.
Tell me what I'm doing wrong?
mdshunk
09-02-2008, 08:09 PM
Tell me what I'm doing wrong?I'd rather think you're doing it right, and the 48K guy is going to lose his back side. Either that, or he was at 72K also, and he spotted the potential for a fat change order that you didn't.
Work is tight I see a lot of projects going way low. He left a lot on the table. I would rather be in your shoes than his. Will they throw out the high and low?
electricmanscott
09-02-2008, 08:44 PM
I'm not sure what you are mad about. The fact that you got out lowballed?
The other guys are probably more pissed at you and rightfully so.
mdshunk
09-02-2008, 08:47 PM
Strong words. No wonder you're in Exile. :wink:
electricmanscott
09-02-2008, 08:58 PM
Strong words. No wonder you're in Exile. :wink:
Am I off base though? :-?
Is this not the very guy we are always barking about?
I'm really not even sure what he's getting at, but I sure would like to know.
It's lonely in Exile. :grin:
CopperTone
09-02-2008, 10:02 PM
very straight forward work - no potential for change orders
I should rephrase my bid opinion. I bid as low as I did at which I felt I still would make a profit. I also felt that as tight as my bid was, we had a great shot at winning the bid. I agree the 48k guy left a lot of money on the table or forgot something.
This was a public bid - no bid peddling or shopping - prevailing wage job - low price wins the job (qualified companies).
Believe me - I lose plenty of work to the lowballer
Here is another one I lost 4 weeks ago
33k
39k
46k
48k
51k
I was the 51K - oh, and I just checked - the low guy was the same company for both bids
My point to all of this , I could shave my profit - say 10% off - and still wouldn't come close to these lowest bids. That is why I ask what am I doing wrong - I know the answer - nothing - move on an keep bidding. I just thought I'd share this with everyone here.
Believe me - I'm not the one to be mad at.
It looks like your in the ballpark, keep bidding and if the lowballer keeps wining contracts and he's not makeing a profit sooner or later you won't have to worry about him.
emahler
09-02-2008, 10:42 PM
someone should definitely audit his payroll and employees....Public works? certified payroll....verify hours and wages...does he have a lot of family working for him? people who may be afraid to lose their jobs?
that's too much of a discrepancy for that small of a prevailing wage job...
dbuckley
09-02-2008, 10:43 PM
Depends - if the lowballer has deeper pockets then desite the fact he's losing money on every job (or at least thats what we believe), there are several other bidders, all qualified to bid, who are just not geting the work at all, and thus they will eventually (grouing for the right word...) "contract" (as in get smaller)
emahler
09-02-2008, 10:46 PM
Depends - if the lowballer has deeper pockets then desite the fact he's losing money on every job (or at least thats what we believe), there are several other bidders, all qualified to bid, who are just not geting the work at all, and thus they will eventually (grouing for the right word...) "contract" (as in get smaller)
that's a stretch when talking projects of this size...not talking $mil projects with only a couple of players....talking micro projects with a ton of players...
Buck Parrish
09-02-2008, 10:46 PM
that's too much of a discrepancy for that small of a prevailing wage job...
It sure is..
CopperTone-
The bidding aint over until the contract is signed.
Get your ass over to the GC and sell yourself. Show him your numbers and show him the other guy may not be able to finish the job.
If you want the work put your salesman's hat on.
growler
09-03-2008, 10:12 AM
that's too much of a discrepancy for that small of a prevailing wage job...
That's what I was thinking. Maybe it's a contractor that's new to doing prevailing wage jobs and doesn't understand how to bid them. Or it could be a residential contractor that doing his first few commercial jobs, they tend to bid real cheap for the first few and then they learn better or go broke.
CopperTone-
The bidding aint over until the contract is signed.
Get your ass over to the GC and sell yourself. Show him your numbers and show him the other guy may not be able to finish the job.
If you want the work put your salesman's hat on.
I bid a fire station where the low bidder was 30% under the crowd. Everyone left the opening laughing, except the lowballer. Well he withdrew his bid and I got it.
He who laughs last etc.:)
I suspect CopperTone will be hearing from the GC soon.:D
CopperTone
09-03-2008, 07:36 PM
no GC - direct bid with the town municipality. They may not know the differnce beside the bottom line. I will call them in the morning to see if they in fact signed a contract with the lowest bidder yet.
IMO he left something out or doesn't know how to price work.
masterinbama
09-04-2008, 07:01 AM
on projects like these where I come in close to everyone except the lowballer.I can almost always go over my bid sheets and find an assembly, or piece of equipment equal to the difference. Missed a school library addition by $9,600 a couple of months ago,sure enough that was exactly what I had put in for 2 4" conduits from the main tele-com room to the addition. This was not on the drawings but in an obscure little note in the specs.
petersonra
09-04-2008, 03:55 PM
I don't know. Place I used to work often got beat out in competitive bids by similar amounts, and the competitors laughed all the way to the bank, even with their low ball bids.
Some people are just really good at targeting projects they want that they think they have some way of turning a buck on that others don't.
Or, they could be desperate to stay in business a few months longer and are taking stuff at factory cost just to keep going.
This is sort of a trade secret but I will let you in on something that sometimes goes on. It is possible to shift a substantial amount of labor from the outrageously high prevailing rate, to something more like what most people are actually paying by preassembling stuff off site and bringing the stuff in ready to plop in place. The less you do on site, the less PW you have to pay. And usually it takes less time that way, so you win on both accounts. And many PW jobs require some fixed and usually arbitrary assignment of how many apprentices versus journeymen that can really create havoc where it is not needed.
I have seen ECs go in and measure up stuff and come back a few days later with prebent and precut conduit, already threaded, and ready to put in place. You have to really know what you are doing, but if you are good at it, you can save a ton of money. I am surprised more people don't do it.
cal1947
09-04-2008, 05:40 PM
why you say outrageously high, it's a fair wage
iwire
09-04-2008, 05:45 PM
why you say outrageously high, it's a fair wage
Because he never feels those of us in the trade should make a living wage, we are no more then trained monkeys.
CopperTone
09-04-2008, 06:11 PM
So I called the director of facilities who is issuing the contract and voiced my concern over the lowest bid. He told me that he shared the same concerns but the EC's references checked out, and he was going to meet with the EC to walk through the entire scope of the job once again to give the guy a chance to see if he "missed something" or felt he left something out and wanted to withdraw his bid.
So, other than that the 48K guy got the job. Good luck to him I say - if he can make a buck doing it for short money ok then - I am a small company and I was 2nd lowest and 32% more than he was. I know I would have only completed about 70% of the work for his price.
I guess there is no more to say about this - just move on to the next bid. I enjoyed all the comments on this though, I'll post the next bid results I'm involved in if anyone is interested to see real numbers.
peter d
09-04-2008, 06:22 PM
Because he never feels those of us in the trade should make a living wage, we are no more then trained monkeys.
Somebody pass the bananas please.
electricmanscott
09-04-2008, 06:45 PM
I still don't get it. Three other guys are probably wondering about the two lowballers. They probably don't get how you guys came up with your price just as you are saying about lowballer #1.
CopperTone
09-04-2008, 07:16 PM
I could eat steak and lobster for my 72k price for that job, and pay a few months mortgage on my cape house. I wasn't lowballing - just a tight bid. I also can tell you that the companies that were 35% over my bid - over the 100k mark - will never get the work - ever - not today , maybe 3-4 years ago, and maybe in 1-2 years from now. But not today. (when it turns - my bids will go up too). I monitor and track public bids in my area, I know what guys are bidding, who is not bidding , and for how much.
hate the game - not the player
electricmanscott
09-04-2008, 08:00 PM
Not hating anyone, just trying to understand.
LarryFine
09-04-2008, 08:01 PM
I still don't get it. Three other guys are probably wondering about the two lowballers. They probably don't get how you guys came up with your price just as you are saying about lowballer #1.And the low-baller is probably saying "I could have asked for how much more?!"
http://www.weight-loss-forum.com/images/smilies/eek2.gif
masterinbama
09-04-2008, 08:26 PM
If I had to worry about 1 72K job to keep my doors open I would be looking elsewhere.
SeanKelly
09-05-2008, 03:22 AM
I'm sure you're aware of this if it exists in Maine, but in Washington on prevailing wage jobs the owner or any other officer who owns at least 30% of the company does not have to pay themselves prevailing wage. We got pretty embarrassed at first and couldn't figure out how some of the guys we're coming in way below us.
petersonra
09-05-2008, 09:22 AM
Because he never feels those of us in the trade should make a living wage, we are no more then trained monkeys.
That was uncalled for.
I do think that the so called prevailing wage is far in excess of what most people in the trade are actually being paid. If you are honest you would admit that is true. It is mostly not about a fair wage, but about a ^^^^^ wage (^^^^^ being something we do not discuss here).
I could eat steak and lobster for my 72k price for that job, and pay a few months mortgage on my cape house. I wasn't lowballing - just a tight bid. I also can tell you that the companies that were 35% over my bid - over the 100k mark - will never get the work - ever - not today , maybe 3-4 years ago, and maybe in 1-2 years from now. But not today. (when it turns - my bids will go up too). I monitor and track public bids in my area, I know what guys are bidding, who is not bidding , and for how much.
hate the game - not the player
Maybe the low baller likes hot dogs and trailers! :D It could be that he really has lower overhead, or maybe he plans on having some low wage positions* for his people. I think you only need one journeyman on a job, and they don't have to show up.
*still in prevailing wage, but listed as the equivalent of broom pushers instead of journeymen
Edit to add: If you do find out what it was, could you let us know?
It takes two journeymen to correct the mistakes of five "broompushers":mad:
It takes two journeymen to correct the mistakes of five "broompushers":mad:
I agree! However, if you're trying to cut costs, you can have 5 journeymen paid as broompushers...if they'll go for it. In the famine times, you could pretty easily get people to work for less, if the other option is unemployment, I hear.
I agree! However, if you're trying to cut costs, you can have 5 journeymen paid as broompushers...if they'll go for it. In the famine times, you could pretty easily get people to work for less, if the other option is unemployment, I hear.
Unfortunately, you're right and these are hard times. Maybe one could lowball the job and share the profit w/ the journeymen/broompushers. I hate to see good people spending half their time looking for a job, on the job.
It's always amazed me how much work people will put into finding ways to "work" the system, or half...uh...redneck engineer something five or six times rather than fixing or doing it right the first time.
As the old saying goes, desperate times call for desperate measures!
He could also be planning on a whole lot of change orders...
As the old saying goes, desperate times call for desperate measures!
He could also be planning on a whole lot of change orders...
Right again. I worked for a huge company and we bid a couple of jobs praying for change orders, just to break even. Sometimes rather than tip off the GC that the specs. did not include a code required item they kept quiet until they got the job, then put in a change order.
Right again. I worked for a huge company and we bid a couple of jobs praying for change orders, just to break even. Sometimes rather than tip off the GC that the specs. did not include a code required item they kept quiet until they got the job, then put in a change order.
That's another one that always got me. I would think that would be a selling point for a higher bid, "Well, I have these items that were in this note, or are needed for this to work, and these other guys don't so they're either trying to cheat you or they the just don't pay attention...":D
I'm glad I'm not in sales...:D :D :roll:
petersonra
09-05-2008, 06:24 PM
A $48k job is probably not going to have a lot of labor in it. Maybe 2 or 3 man weeks. Might be the owner is planning to do all the work himself. I know a guy around here does that. He gets LOTS of these small contracts from local governments.
He has a full beard and looks like a stereotypical hillbilly in his denim bibs, but is sharp as a tack and one of the better electricians I have run across. I think the whole company consists of him and his brother. They do really good looking work.
EBFD6
09-05-2008, 07:52 PM
That's another one that always got me. I would think that would be a selling point for a higher bid, "Well, I have these items that were in this note, or are needed for this to work, and these other guys don't so they're either trying to cheat you or they the just don't pay attention...":D
I'm glad I'm not in sales...:D :D :roll:
There is no sales pitch involved in public work ( at least in MA, maybe different in other areas of the country).
Low bidder wins, period.
There might be an out for the municipality if the low bid is off by so much from the rest of the pack, I don't know all of the loop holes, but 99% of the time there is no choice - hands are tied, low bid gets the job.
iwire
09-05-2008, 07:59 PM
There is at least one large Massachusetts EC that always underbids public work, gets the jobs then from day one starts logging anything that slows things down and goes after compensation for that. By the time it's all said and done he has made much more then the fair bidders. :mad: This is one job after another.
EBFD6
09-05-2008, 08:12 PM
There is at least one large Massachusetts EC that always underbids public work, gets the jobs then from day one starts logging anything that slows things down and goes after compensation for that. By the time it's all said and done he has made much more then the fair bidders. :mad: This is one job after another.
HMMMMMM, rhymes with Stiffen maybe? :roll:
iwire
09-05-2008, 08:34 PM
HMMMMMM, rhymes with Stiffen maybe? :roll:
What a rep they have. :mad:
And the low-baller is probably saying "I could have asked for how much more?!"
http://www.weight-loss-forum.com/images/smilies/eek2.gifThere is a Lot of money sitting on the table here!!
ceb58
09-05-2008, 10:13 PM
And the low-baller is probably saying "I could have asked for how much more?!"
http://www.weight-loss-forum.com/images/smilies/eek2.gif
Just another reason to make bid rigging legal:grin: :grin: :grin:
iam14sure
09-05-2008, 10:16 PM
I've lost numerous bids to a company that was family owned and the brothers did most of the work. Found out later that because they were principles of the coporation they did not need to pay themselves prevailing wage or have workman's comp. Can't compete with that.
I've lost numerous bids to a company that was family owned and the brothers did most of the work. Found out later that because they were principles of the coporation they did not need to pay themselves prevailing wage or have workman's comp. Can't compete with that.
I still don't understand why anyone would want to work free, unless they wanted to eliminate the competition?:confused:
ivsenroute
09-06-2008, 12:20 AM
The lowballer is way out of line. Let them continue to suffer with no profits until they are out of business.
petersonra
09-06-2008, 01:03 AM
There is at least one large Massachusetts EC that always underbids public work, gets the jobs then from day one starts logging anything that slows things down and goes after compensation for that. By the time it's all said and done he has made much more then the fair bidders. :mad: This is one job after another.
He is doing to a larger extent what virtually every contractor does to a lesser extent on every job. Its just a matter of degree. I don't like operating that way, but I understand the attraction some places have to the low bid. Its part of the game. Just like the way female and minority bidders get preference.
iwire
09-06-2008, 06:03 AM
He is doing to a larger extent what virtually every contractor does to a lesser extent on every job. Its just a matter of degree.
You really have no idea at all about this company.
It is like saying the person doing 36 mph in a 35 zone is the same as a drunk driver going 120 mph.
petersonra
09-06-2008, 01:46 PM
You really have no idea at all about this company.
It is like saying the person doing 36 mph in a 35 zone is the same as a drunk driver going 120 mph.
Perhaps, but as long as they are playing by the rules, I don't see you can do much about it. If the rules are that badly written, they need to be fixed.
iwire
09-06-2008, 02:44 PM
Perhaps, but as long as they are playing by the rules, I don't see you can do much about it. If the rules are that badly written, they need to be fixed.
You would have to ask his lawyers if he plays by the rules.
You would have to ask his lawyers if he plays by the rules.
We have an old saying in the South.."what goes around comes around".
There is at least one large Massachusetts EC that always underbids public work, gets the jobs then from day one starts logging anything that slows things down and goes after compensation for that. By the time it's all said and done he has made much more then the fair bidders. :mad: This is one job after another.
whats funny is that same Mass lowballer is here in nc and is doing the airport expansion. We have landed 7 stores and restaraunts at the expansion and I hear almost daily from the construction manager about some of thier tactics. It has actually made bidding our projects inside more difficult. they have made the construction manager so upset that we have to go through huge hoops to get anything passed off. The regional manager that this Mass company has hired here locally is someone I used to work with and he is a serious scum ball. so I am sure he fits right in.
peter d
09-07-2008, 10:38 PM
whats funny is that same Mass lowballer is here in nc and is doing the airport expansion. We have landed 7 stores and restaraunts at the expansion and I hear almost daily from the construction manager about some of thier tactics. It has actually made bidding our projects inside more difficult. they have made the construction manager so upset that we have to go through huge hoops to get anything passed off. The regional manager that this Mass company has hired here locally is someone I used to work with and he is a serious scum ball. so I am sure he fits right in.
Small world as they say. :roll:
whats funny is that same Mass lowballer is here in nc and is doing the airport expansion. We have landed 7 stores and restaraunts at the expansion and I hear almost daily from the construction manager about some of thier tactics. It has actually made bidding our projects inside more difficult. they have made the construction manager so upset that we have to go through huge hoops to get anything passed off. The regional manager that this Mass company has hired here locally is someone I used to work with and he is a serious scum ball. so I am sure he fits right in.
When some contractors say there going to hire more people...they mean lawyers:mad: Even the people in their own company can't stand them.
Brady Electric
09-08-2008, 05:57 AM
Hate the term lowballer
Your price should always be the amount you need to do a good job and make a resonable profit.
All of us have different overheads, so our profit margin is different
I'm never the lowest and most of the time the highest because if I don't make a good profit I'd rather sit at home
Don't know how long you have been in business but I have found that a mans reputation and personality has more to do with you getting the job than the price.
Also I do a worksheet on what I will do and a sheet with a load calculation
I always mention about workers comp , liability insurance and how long you will guarantee the job (I warranty a job for one year from the final inspection)
Always write up the bid in detail so they can compare apples to apples
Don't really see that you are doing anything wrong if its a price you can deal with at the end of the day (no matter what I think your better off than the lowest bidder)
Those so called low ballers will be out of business soon enough
At the end of the day if its a price you feel good about, I think you have done your job
Most of my work comes from recommendations
I belong to Carolina Real estate Investors Association and they keep me busy
If work does get slow I get on my local Yahoo group and announce that I have a small opening for new work and the phone rings.
Sorry this was so long but good luck
One last thing is that everywhere I go somewhere in the conservations I mention I'm a Electrical Contractor and everyone usually ask for a card and sooner or later they call.
Feed store, grocery store, gas station, doctor's office, hospital and so on.
Yes the other day at the doctors office three of the nurses and even my doctor wanted my business card. Turns out one of my nurses husband is a GC
SORRY GUYS FOR THE LONG POST
I love what I do and it shows.
Just hang in there
Semper Fi Buddy
emahler
09-08-2008, 06:39 AM
brady....you are comparing apples to oranges...you are talking about general electric....this thread is primarily focusing on public works....totally different ball game...
Brady Electric
09-08-2008, 07:01 AM
Sorry about that
Hate the term lowballer
Your price should always be the amount you need to do a good job and make a resonable profit.
All of us have different overheads, so our profit margin is different
I'm never the lowest and most of the time the highest because if I don't make a good profit I'd rather sit at home
Don't know how long you have been in business but I have found that a mans reputation and personality has more to do with you getting the job than the price.
Also I do a worksheet on what I will do and a sheet with a load calculation
I always mention about workers comp , liability insurance and how long you will guarantee the job (I warranty a job for one year from the final inspection)
Always write up the bid in detail so they can compare apples to apples
Don't really see that you are doing anything wrong if its a price you can deal with at the end of the day (no matter what I think your better off than the lowest bidder)
Those so called low ballers will be out of business soon enough
At the end of the day if its a price you feel good about, I think you have done your job
Most of my work comes from recommendations
I belong to Carolina Real estate Investors Association and they keep me busy
If work does get slow I get on my local Yahoo group and announce that I have a small opening for new work and the phone rings.
Sorry this was so long but good luck
One last thing is that everywhere I go somewhere in the conservations I mention I'm a Electrical Contractor and everyone usually ask for a card and sooner or later they call.
Feed store, grocery store, gas station, doctor's office, hospital and so on.
Yes the other day at the doctors office three of the nurses and even my doctor wanted my business card. Turns out one of my nurses husband is a GC
SORRY GUYS FOR THE LONG POST
I love what I do and it shows.
Just hang in there
Semper Fi Buddy
Great post Brady! I think your advice is good froma one horse outfit to the multi-national. Keep up the good work!:D :D
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