Bid shopping or peddling

[Sierrasparky]

Has anyone noticed that on public works projects latley that more and more General contractors are bid shopping a project well after they are awarded the bid.

Here in Ca. you the prime contractor must list all the subs in the bid that will work the job and only one sub per trade. I'm sure it's similar for other areas.

These GC go out and try to get others like a EC to bid the work (work the GC had already been awarded) and provide a bid with submittals and other such paper work.Tthey do this so their own people won't have to do that work. They then take your bid with all the submittals and such and commence the work. Maybe the'll hire you as a sub maybe not. I don't even think it's legal for them to hire you at that point without approval from the agency paying.

Anyone else see this happening?

 

[LarryFine]

I guess they're thinking that, in order to maximize profit, if they can't increase the income, they have to decrease the outgo.

I done the same thing: if I get a job based on pricing of certain goods, once I get the job, why not shop for a better price on the equipment?

 

[Rewire]

I see it all the time generals are looking right up to the last minute for cheaper subs we just lost a job to a guy who underbid us by $50,000.00 he has been in business a whole six months but does the general care of course not its bottom line to him.
At one time owners would put in the bid specs that subs had to have a track record of completing similar jobs.

 

[Sierrasparky]

The problem is it's illegal on public works projects.
If the prime contractor submits a bid and gets the job, he must use the subs he lists in the bid. He cannot shop the job around for a better price looking for another sub. If he lists no subs he must do all the work himself regardless with his employees. That's the law. Of course he can hire anyone he wants as an employee.

Last summer I had a contractor on a public works project actually want me to submit a bid on an already awarded job and include submittals. He did not intend whatsoever to award me the job. All he was after was the submittals and related paperwork for free.

Boy when I called him on his scheme he became all appologetic. I threatend to contact my local contractors association about it. Boy did his tune change.

 

[brantmacga]

I bid a public-works job for a GC who was awarded the contract over two months ago, and they're doing the same thing. I've been asked to re-bid twice. The first time I re-bid, the cost of copper had come down substantially since the initial proposal; I didn't mind so much re-bidding for that purpose, but I think we all know the original contract price between the city and the GC will most likely remain unchanged. I had to bid it again last night, but cut out a few fixtures and receps to lower the cost instead of lowering mine.

 

[480sparky]

...........The first time I re-bid, the cost of copper had come down substantially since the initial proposal; I didn't mind so much re-bidding for that purpose, ..........

If the price of copper goes up, do you get to raise your bid price?

 

[USMC1302]

I do quite a bit of public works bids. As an owner I can reject a change in the sub list if it is different from what was originally submitted. It always amazes me how some rather large GC's will bid shop and continue to use low quality subs that have caused problems on numerous jobs. Some owners will eventually decide to take a pass.

 

[Sierrasparky]

If the price of copper goes up, do you get to raise your bid price?

You can if you put in your contract that " this bid is subject to current market price of materials"
Otherwise you are at the mercy of the public agency. In good times they usually will accomodate you. Today who knows.

 

[shockin]

I done the same thing: if I get a job based on pricing of certain goods, once I get the job, why not shop for a better price on the equipment?

I could not disagree with you more. There is nothing I hate more then a GC that wins a job then shops my number so why would I think it's okay to do the same thing? I also firmly believe that is is oncorrect to "shop" the different suppliers prior to the bids being turned in in hopes of saving a few bucks.

 

[USMC1302]

Back to the OP, once that bid is submitted with the sub list, that's it in my book. The GC wants to make a change? I, as the owner now have a say. I'd venture to say that many times those that shop bids, and try to beat down the subs, something will get missed. Don/t come knockin' with a PR or change order later....By the way ladies and gents, you have a great site here.

 

[JWCELECTRIC]

In MA low bid gets the job on public projects. GC can't pick his subs, unless the sub is restricked to the GC, then the GC can use that sub at the low bid price. Lot of times the restricked sub can't do the job at the low price,

 

[brantmacga]

If the price of copper goes up, do you get to raise your bid price?

The cost will adjust until a contract is signed.

 

[hardworkingstiff]

The cost will adjust until a contract is signed.

Same here, and I need a deposit with the signing so I can order the copper and not get burned with the cost.

 

[Nick]

I done the same thing: if I get a job based on pricing of certain goods, once I get the job, why not shop for a better price on the equipment?

The suppliers know that game and which contractors play it. All that does is get you a higher price at bid time in anticipation of you beating them down later.

 

[cdslotz]

I never shop bids after the fact. I usually put my lighting out to my main 3 distributors, who share in writing all of our lighting orders. If supplier A is low on bid day, he get's the job and I don't beat him up. On the size of jobs I bid, the lighting price can win or lose a job for you.
If I shopped supplier A's price after the fact, do you think he would bust his ass to get me a good price again?
I've been shopped after the fact enough to remember how I feel being told "catch you on the next one".
If your vendor knows that you are honest, and you will reward him every time he's low, he will ALWAYS work hard to get there.

 

[LarryFine]

I could not disagree with you more. There is nothing I hate more then a GC that wins a job then shops my number so why would I think it's okay to do the same thing? I also firmly believe that is is oncorrect to "shop" the different suppliers prior to the bids being turned in in hopes of saving a few bucks.

If I submit a bid to a contractor, it's not binding on anyone unless/until we have a signed contract. Once that happens, I can sue for lost profit if he refuses to fulfill.

If there's no contract between the GC and myself, what is thye wrong-doing? Maybe I'm missing something? If what's being done is illegal, why is it continuing?

 

[USMC1302]

Everyone wants the rules to be to their advantage. On public works bids(where I'm from), what that GC submits that day is it. Contrary to popular belief, the awarding agency can award the lowest, responsible and best bid. There is a little subjectivity allowed. I cannot shop the GC's bid, and I will not allow him to play musical subs either. All the suppliers I deal with as well as contractors know to sharpen the pencil the first time. Public works are a different animal somewhat. The OP's example could be eliminated by the awarding agency if they chose to do so.

 

[shockin]

If there's no contract between the GC and myself, what is thye wrong-doing? Maybe I'm missing something? If what's being done is illegal, why is it continuing?

I am not sugesstion that bid shopping is illegal. (Public projects may be different but we don't bid those) I am simply saying that I am as strongly opposed to shopping my suppliers bids just as am I a GC shopping my bid. I don't know how that process benefits anyone. If you are a "shopper" the distributers will soon discover it and will start playing games with you as well. They are certainly smart enought to figure out if your sharing other peoples numbers with them, then you are definatly sharing their numbers as well.

Maybe if someone could explain the benefits of bid shopping to me that would help.

 

[bbaumer]

This has always gone on.

My mentor of sorts in this industry years ago told me to "dance with who 'brung ya".

Very good advice.

What's worth more, a few $ on this job or that job or your reputation?

Shopping only works for awhile. It catches up to you and you won't get good pricing after you are figured out. If subs and suppliers know they can trust you with their numbers you will get better prices earlier, not the last minute sell-out crap that happens right before bids are due. They'll still price you as they cannot afford not to but you likely aren't getting their "good" number.

I always hated bidding to generals for this very reason. Some didn't get my best number or any number at all if work was good at the time. If a gave them a not-so-good number due to their reputation I suspect others did too which lessens their chance of getting the job.

On the rare occassion I would get called and asked if I would take a job for a certain $number I just told them to "dance with who 'brung ya" and hung up.

 

[USMC1302]

I agree. Not illegal, and is done a lot. Doesn't have to be tolerated on public works jobs. Just don't see that it is a good practice in the end. On another note, how about the contractors you have to chase down and they won't return a call? If you're good and I ask you for a quote/bid it IS alright to tell me you're busy and can't do it. If we've worked together before I probably want you back. I WILL still call you for the next job. If I have to chase you down, or you shoot me a ridiculous number, I may not...