GC awarded with my number, now wants to negotiate

[mkgrady]

I disagree in fact I would argue that more often then not at least with this office we identify things that end up saving the sub money and risk. Firstly there is no sub until a subcontract is written and the subcontract goes to the best value bidder which indecently is not always the lowest number. We do not just take the low number and share it with all the bidders or whisper it into he ear of the brother in-law. Our negotiations are part of a thoughtful and thorough review of the project scope and serves a purpose in ensuring that the bidder even understands the project requirements. I cannot just sign up the low guy and expect all to be right with the world. That is not reasonable and is certainly not good business. I will list a couple real examples:

EC has 2nd tier sub for light pole bases for 35K on the quote but our concrete bidder can do it for 20K. 15K in contingency. Good business.
MC quoted TRANE for 200K but CARRIER meets spec and is 150K. Easy 50K. MC still makes his OH, MU and Profit.
Same MC has a 2nd tier crane for 25K but roofer will lift the equipment when they mobilize for 5K. We just put 70K more in contingency in about 4 phone calls before setting foot on site.
Same job. EC missed the UL master label requirement in the lightning protection spec. 10K change order. I can now write that CO and not be stuck eating it because bidder did not read the LP spec.
EC has 30K for demo of existing EMT. Demo sub has 20K for demo of EMT. De-scope from EC and put 30K in contingency. How does that screw EC? You know he did not give back the OH and Markup on the 30K and now who carries the risk?? Easy 30K on contingency. Why should that be your windfall when we hold the contract?

The notion that once a bid is handed over the GC now owes you the job is ridiculous.

A bidder leaves out part of what is required and you give him a change order to cover his mistake? I think that is not the norm.

 

[luckylerado]

A bidder leaves out part of what is required and you give him a change order to cover his mistake? I think that is not the norm.

Sucks right... All the more reason to review and negotiate. In the end I am on the hook because I have the contract with the owner. EC can walk away and what recourse do I have?? Call the bonding company if there is one for 10K?? Go to court?? Probably not. How many ECs here would belly up to eat it?

 

[growler]

EC has 30K for demo of existing EMT. Demo sub has 20K for demo of EMT. De-scope from EC and put 30K in contingency. How does that screw EC? You know he did not give back the OH and Markup on the 30K and now who carries the risk?? Easy 30K on contingency. Why should that be your windfall when we hold the contract?

EC-$30K
Demo-$20K
Saved-$10K

You may save that $10K and you may not. Electricians know what they are doing when it comes to disconnecting equipment and demoing conduit. If the place is to be gutted and all circuits are dead then a demo crew would be alright but if there is anything to remain of existing them a demo crew is not always the best idea.

 

[growler]

He also thinks whoever is lower didn't attend pre-bid. There are some things not detailed on plans that only say "relo & protect as required" for the server room. That includes relocating a 400/pair copper line that isn't detailed on the drawings, but covered under that line above.


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Sucks right... All the more reason to review and negotiate. In the end I am on the hook because I have the contract with the owner. EC can walk away and what recourse do I have?? Call the bonding company if there is one for 10K?? Go to court?? Probably not. How many ECs here would belly up to eat it?

We may get to find out if a sub will eat it. Sounds like the GC is just looking at low numbers.

 

[kwired]

Seems more fair for GC to request separate bids for electrical, fire alarm, and communications, even demolition from the beginning.

If an EC wants to bid all three categories he could certainly be awarded all three. Demolition is a little more tricky, if a second party removes or damages things that need to stay the EC should not be responsible for any cost to restore those items.

 

[luckylerado]

EC-$30K
Demo-$20K
Saved-$10K

Saved 30K due to double scope. Both had it on their quote but estimator did not catch it on bid day. Evil GC puts 30K in pocket but then does not blink an eye at a 10K change order. Win Win Win.

 

[kwired]

Saved 30K due to double scope. Both had it on their quote but estimator did not catch it on bid day. Evil GC puts 30K in pocket but then does not blink an eye at a 10K change order. Win Win Win.[/QUOTEof course not. If owner requests a change they expect it to cost more, GC keeps the 10k and still makes additional profit from the change order.

Some wonder why there seems to be a general dislike for GC's? They are legal "bookies" in a way.

 

[cdslotz]

Same job. EC missed the UL master label requirement in the lightning protection spec. 10K change order. I can now write that CO and not be stuck eating it because bidder did not read the LP spec.

I'm assuming the EC was doing the LPS with his own forces.

Nearly every GC I bid to has their estimating assistant call me prior to bid time and go over EVERY section of the specs to confirm scope.

This would have never been missed by the GC....in fact, I find it hard to believe the EC would have missed such a common requirement.

I also find it hard to believe this, and all of the other things you mentioned weren't flushed out during pre-award interviews.

...but that's just me

 

[luckylerado]

I find it hard to believe the EC would have missed such a common requirement.

A truth has no requirement of belief in order to remain a truth. Do some estimating in Missouri and then get back to me with what you believe to be common sense....

 

[gadfly56]

I've never had this happen before so I'm unsure what to really think.

I was low bid on a small university university building renovation. I was low by $37k.

My proposal includes fire alarm and networking, which will be done by a subcontractor. They submitted their price to me as a package deal.

The GC has other bids on networking, and they want me to have my sub split their work. The GC, who I've bid with but never worked with, actually found my sub and called them directly to ask them to split it after I declined. My opinion was that you won the job with my price, so we do all the work. I'm not one for nickel and diming anyone. I felt like coming in as low as I did that I have enough leverage to force the issue. According to the GC, after speaking with my sub, if they used their own networking sub they would save $28k.

I haven't spoken to the sub as I found out about this Friday. Is this normal for anyone else? I get the point is to make all the dollars you can, but I've always been more concerned with strong relationships that make us all money.

I'm going to call my guy tomorrow and get his opinion and see what he wants to do.

Opinions/advice welcomed.


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This is called tortuous interference with your relationship with your sub. At my last company we normally would refuse to cough up the number.

 

[cdslotz]

A truth has no requirement of belief in order to remain a truth. Do some estimating in Missouri and then get back to me with what you believe to be common sense....

How is estimating in Missouri any different than anywhere else?

In my 40 years of electrical estimating, one thing is for certain....properly scoping a sub pre or post bid IS common sense

This one slipped by both opportunities and was put on the job.

 

[ksmith846]

That's because most manufacturers won't release gear and fixture pricing until an hour of the bid time on large projects. On the smaller stuff the suppliers will usually build up a package and price it in-house on the gear. Fixture suppliers are the worst, and if you ask for it early, you will get a terrible quote. It's equally as frustrating for us as it is for you, but because so many people shop quotes around, the manufacturers have put an end to sending quotes early.

I send my proposal without a price as early as possible for review, and then I send a price as soon as I have it.



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Lighting Rep's hold those prices until the last minute all the time on larger projects....Mainly (IMO) to make sure that the people they want to have the correct price get it. Likewise, also because they want some other EC's to get the higher "street price".

If you are not building relationships with these Rep's and getting direct prices, you will always run the risk of getting the street price, which in some cases can be more that 25% higher than the preferred contractors' pricing.

Example you send your counts to Distributor A......he has 5 other EC requests, 2 of whom have stiffed or crossed the specified Manufacturer in the past.......the Rep. sends Distributor A the street price because he does not want the other 2 EC's to get the correct number and sub their package before signing their contract......so you and the other 3 ECs get screwed and receive the wrong number as a result. While other get a direct quote with the correct pricing and have a big edge on bid day.

The GC buyout system is a standard practice here.....I have no issue myself with them wanting to reduce my scope and subsequent risk, while at the same time keeping all of my markups.

I suggest if you are going to breakout costs for different SOW's to only breakout the actual cost. Keeping your markups in your base lump sum electrical bid. This way if they want to take and SOW away you can hang on to the markups while not having to finance the costs. Especially in this case where you already left $37K on the table. I understand this may not work every time as it makes your base bid # higher and price you out of the work, but this will not come out until buyout time and you still have the option to give some of this money back when they try to buyout your base bid # after removing the other Scopes.

Example

 

[luckylerado]

How is estimating in Missouri any different than anywhere else?

GC estimating and EC estimating are two very different animals. GC estimating, especially MEP work, in the middle of a state where the education and licensing requirements on becoming a hair dresser are quite literally more restrictive than becoming an EC or an MC makes things a little more difficult than in those areas with a strong union presence or state sponsored professional licensing requirement. $50 will get you an EC license in much if not most of this state and the municipalities that do require a license rarely enforce their own policy STL and KC being an exception. When I was on the EC side of the equation, I had been asked to produce a license in this state 1 time since 1997 and it was to pull a permit on a job that I only set foot on one time in 6 months and then again to document a third party riding stable inspection in the Springfield area. I think Mike Holt rated MO 49th this year.

 

[cdslotz]

GC estimating and EC estimating are two very different animals. GC estimating, especially MEP work, in the middle of a state where the education and licensing requirements on becoming a hair dresser are quite literally more restrictive than becoming an EC or an MC makes things a little more difficult than in those areas with a strong union presence or state sponsored professional licensing requirement. $50 will get you an EC license in much if not most of this state and the municipalities that do require a license rarely enforce their own policy STL and KC being an exception. When I was on the EC side of the equation, I had been asked to produce a license in this state 1 time since 1997 and it was to pull a permit on a job that I only set foot on one time in 6 months and then again to document a third party riding stable inspection in the Springfield area. I think Mike Holt rated MO 49th this year.

What does this have to do with not scoping your sub...lol

 

[luckylerado]

What does this have to do with not scoping your sub...lol

I guess I do not understand what you are getting at? My whole point has been how important it is to review and revise the scope prior to boots on the ground.

GC: Scope is all of Division 26. You have that correct EC?
EC: Yep, got it all. No problem.
GC: Ok here is your sub-contract for all of Div26
EC 6 months later: Ok. all done
GC: What about UL Master label in 26 41 01 para 3.x.x??
EC: oh we must not have caught that or show me where I included that on our proposal or my personal favorite, Ive been in business for 40 years and we never do that way but here is my price to do it now that I have read the contract documents.
GC: Now what?? Pull bond, sue or eat it and finish the project.

If you have found a sure fire way to avoid these types of conversations, please share the magic words you use to pull the average head out of the average orifice.

What GC is giving you an itemized work list as a scope? I think we are talking about projects on a whole different scale.

 

[Ultrafault]

I've lived and worked in Missouri my whole life. Lucky hits the nail on the head. If people here read documents we would not call it the Show Me State.

 

[kwired]

Missouri is pronounced "Misery", right?

 

[luckylerado]

Missouri is pronounced "Misery", right?

Mazura...

By the way Missouri guys, No offense. I am a native and a lifer.

 

[kwired]

Mazura...

By the way Missouri guys, No offense. I am a native and a lifer.

That sounds like it has to come from a native and nobody else is allowed to say it that way

When Cornhuskers and Tigers were still regular opponents we used to say Misery is coming to play the Huskers.

Kansas State was the Mildcats.

It is always windy in Nebraska because Iowa sucks

 

[peter d]

MC quoted TRANE for 200K but CARRIER meets spec and is 150K. Easy 50K. MC still makes his OH, MU and Profit.

Going from Trane to Carrier is a downgrade in my opinion.