GC awarded with my number, now wants to negotiate

[brantmacga]

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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[kwired]

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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Seems to me they can choose the next higher bid that is $37K higher to try to save the $28K they want to save.

You can bet the GC probably wants to line their pocket with the $28K they are supposedly going to save instead of passing it on to the owner.

 

[ptonsparky]

That would just PMO! :rant:

Otherwise, Nothing constructive from me.

 

[Fulthrotl]

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.

i'm guessing you have worked with your sub before?
i'm also guessing you have a reasonable profit built into your subs work?

maybe the GC can also supply the material, and save some money there?
maybe he could also supply you with some helpers?
i wonder how else he could grind you.... i'm sure there is a way.

that part highlighted in red above.... AFTER you said no, they did this? Gee Whiz?

if it were me, i'd take the opportunity you now have to escape from this. it is
a gift.

 

[brantmacga]

Seems to me they can choose the next higher bid that is $37K higher to try to save the $28K they want to save.

You can bet the GC probably wants to line their pocket with the $28K they are supposedly going to save instead of passing it on to the owner.

I am 100% certain they want to put the money back in their pocket.

I'm also fairly certain the next lowest bidder went with my same subcontractor. That EC is also local, and the sub I used is the only vendor in this area for the fire alarm that was spec'd.


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[brantmacga]

i'm guessing you have worked with your sub before?

Yes.

that part highlighted in red above.... AFTER you said no, they did this? Gee Whiz?

YES!!!

if it were me, i'd take the opportunity you now have to escape from this. it is
a gift.

That's what I'm leaning towards. This situation has me pretty apprehensive about working with this company.

It's been almost two weeks since this job bid, and after being told we would be awarded the job, they ceased all contact. I'm certain at this point they were shopping my bid around and were unsuccessful.



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[George Stolz]

I think your instincts are right on, and all this before a shovel hits the ground. Imagine how well you'll get along towards completion?

 

[Cow]

This has red flags all over it. Do you need the work?

 

[Dzboyce]

Did the GC have to list you as a subcontractor in their bid proposal? Here in Washington, that is now required because of bid shopping GC's. The GC cannot change a subcontractor after the bid opening without approval of the consulting engineer.

if you don't plan on working with this GC in the future, I'd fry his ash and report him to the owner/consulting engineer. What the GC is trying to do is just plain wrong, and you don't have to stand for it.

 

[JFletcher]

FM (sound it out).

 

[roger]

My opinion was that you won the job with my price, so we do all the work.

Absolutely!!!

Roger

 

[growler]

That would just PMO! :rant:

Otherwise, Nothing constructive from me.

There was another post about an EC that was low bidder only to find the GC wanted to negotiate price a few weeks back.

I wonder how the GC would feel if you won the bid and then tried to negotiate for more money.

 

[petersonra]

I wonder how the GC would feel if you won the bid and then tried to negotiate for more money.

It is a pretty common practice. A lot of people bid low hoping they can make money on up charges and adders.

Personally, the way I see it, the GC can negotiate all he wants. That does not mean the price will change any.

ETA: It seems to me that the sub may have played you. if the GC can get the same work from the same guy for $28k less, it would appear the sub did not give you his best price. if you give the GC a deduct for the cost of the sub's work and keep the overhead you built in for that work, how much money will you make with zero work and zero risk involved?

 

[cdslotz]

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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Give the GC back one half of your sub's price. Tell him, that's my number, take it or leave it.

 

[luckylerado]

This is just doing good business from a GC standpoint. We do this on every single job we get. Once we know it is ours, we will call all the subs and negotiate the buyout. Our best relationships generally get last look but even the folks that have been with us for years get the call to fine tune their best and final. Truly our best money is made on the buyout before a single shovel is turned.

 

[growler]

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, According to the GC, after speaking with my sub, if they used their own networking sub they would save $28k.

ETA: It seems to me that the sub may have played you. if the GC can get the same work from the same guy for $28k less, it would appear the sub did not give you his best price. if you give the GC a deduct for the cost of the sub's work and keep the overhead you built in for that work, how much money will you make with zero work and zero risk involved?

I don't read it that way. I think the OPs sub it $28K higher than another sub that the GC is aware of. He wants the OPs sub to still do the Fire Alarms but wants to give the networking to someone else. The GC called the OPs sub to see if he could negotiate with them for a lower price on the networking or split the job. Doesn't sound like he got anywhere.

Also if the GC wanted seperate bids for electrical, alarms and networking he should have put them out for seperate bids.

 

[electrofelon]

Also if the GC wanted seperate bids for electrical, alarms and networking he should have put them out for seperate bids.

Exactly. Seems as simple as that to me.

 

[petersonra]

I don't read it that way. I think the OPs sub it $28K higher than another sub that the GC is aware of. He wants the OPs sub to still do the Fire Alarms but wants to give the networking to someone else. The GC called the OPs sub to see if he could negotiate with them for a lower price on the networking or split the job. Doesn't sound like he got anywhere.

Also if the GC wanted seperate bids for electrical, alarms and networking he should have put them out for seperate bids.

In another post the OP said this:

the sub I used is the only vendor in this area for the fire alarm that was spec'd.

If the sub that was bid is the only one in the area doing that particular fire alarm system, how could it be anyone else?

 

[growler]

In another post the OP said this:
If the sub that was bid is the only one in the area doing that particular fire alarm system, how could it be anyone else?

The GC wants Brant's sub to do the Fire Alarm but he has found someone else to do the networking at a cheaper price. It's the low voltage part of the job that the GC now wants to split.

Brant and the low voltage sub may be willing to let someone else do this portion of the work but it doesn't sound as if the GC has made a buyout offer.

 

[Besoeker]

A couple of thoughts.
If the GC wants to deal with several different suppliers for the different parts of the project, they can.
If the different parts need to comminicate/interface then it could get very messy.
Responsibilities clouded to say the least.
Who pays for meetings between the different suppliers?
Who determines which supplier is responsible when the system malfunctions or doesn't perform as expected?

If the project gets split up you (OP) need to ring fence the exact scope of your supply and what exactly you will warranty.
It may lose you project but avoid a money pit.