Low bidders

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highpowered

Member
Location
los angeles
I have been losing bids lately to the lowest bidder. This has never been a problem as most people pick in the middle. For instance a 350kw diesel generator bid for a hotel in a residential neighborhood I bid at 265k. Just the generator+transfer switches, exhaust, concrete pad, engineering, and wire totaled 195k. Thats 0 labor cost in the bid yet. 2 companys bid it at 165k out the door. The only way thats possible is to take away all the extras you would need for noise and fire compliance. This has been the case alot lately my competitors are tricking the clients in the wording of the contract. I cannot sleep at night if I do that knowing its not the right thing to do or is it? I am beyond frustrated and all the blame lies on my shoulders. Any ideas on competitive bidding or any help would be greatly appreciated. I havent won a commercial job in a while and the company cant survive another month.

Another question I have are there any bid sites that I can log onto without having a project link from a GC? I want to divert money from advertising to finding GC that dont advertise?
Thanks in advance!!
 

gadfly56

Senior Member
Location
New Jersey
Occupation
Professional Engineer, Fire & Life Safety
Is it possible you are bidding the job above the spec? Putting in things you "know" they'll need, but aren't in the spec or necessary for code compliance? Sometimes we want to do the "best" job, when what the market is looking for is the "good enough" job. Or you want to head off the surprises at the pass, reduce the job friction by taking care of it up front. It took me a while to understand, but this is a really bad way to bid. We get packages all the time where some MEP firm slaps in the fire alarm system as an afterthought and you KNOW the design is wrong. Don't tinker, bid it the way you got it. The worse the spec and drawing, the less you give them. RFI only the stuff that's going to be a life/property hazard if it isn't done right. Be up front in the bid, put a disclaimer about the spec and drawing package being "true and accurate" and any extras the AHJ demands are going to be a change order. This is how other people make money, you can too. You can say it stinks, but that's the way it is.
 

ceb58

Senior Member
Location
Raeford, NC
Is it possible you are bidding the job above the spec? Putting in things you "know" they'll need, but aren't in the spec or necessary for code compliance? Sometimes we want to do the "best" job, when what the market is looking for is the "good enough" job. Or you want to head off the surprises at the pass, reduce the job friction by taking care of it up front. It took me a while to understand, but this is a really bad way to bid. We get packages all the time where some MEP firm slaps in the fire alarm system as an afterthought and you KNOW the design is wrong. Don't tinker, bid it the way you got it. The worse the spec and drawing, the less you give them. RFI only the stuff that's going to be a life/property hazard if it isn't done right. Be up front in the bid, put a disclaimer about the spec and drawing package being "true and accurate" and any extras the AHJ demands are going to be a change order. This is how other people make money, you can too. You can say it stinks, but that's the way it is.

That's all there is to say.
If you are adding things that are not in the specks then you are cheating your self out of ether the job or money. Just a fact of contracting.
 

Fulthrotl

~Autocorrect is My Worst Enema.~
I have been losing bids lately to the lowest bidder. This has never been a problem as most people pick in the middle. For instance a 350kw diesel generator bid for a hotel in a residential neighborhood I bid at 265k. Just the generator+transfer switches, exhaust, concrete pad, engineering, and wire totaled 195k. Thats 0 labor cost in the bid yet. 2 companys bid it at 165k out the door. The only way thats possible is to take away all the extras you would need for noise and fire compliance. This has been the case alot lately my competitors are tricking the clients in the wording of the contract. I cannot sleep at night if I do that knowing its not the right thing to do or is it? I am beyond frustrated and all the blame lies on my shoulders. Any ideas on competitive bidding or any help would be greatly appreciated. I havent won a commercial job in a while and the company cant survive another month.

well, it sounds like you've lost the bid before you even bid it.

i'm gonna look at it differently, or try to.
how are they getting the same spec'd gear that much less than
you are?

i've seen stuff like this in lighting packages, most notably from
the rep that does metalux in this area...... a package that should
have cost me $8-$9k comes in at $37k?

so, your only hope, IMHO, is to get inside the decision cycle, so
you can value engineer what you are going to install.

i'd suggest you go further up the food chain, if that is possible.
just bidding on a package against someone who'd in a different
column on the price book is like getting in a stick fight, with a
popsicle stick.

if you are in LA, there is supposed to be a lot more work happening
in this coming quarter... dunno what your flavor of work is, but
shoot me a PM, and i'll see if there's anywhere i can point you.

port of long beach had a bunch of work going on, and that came
to a standstill due to environmental issues. it's not going to
light back up for a while... the middle harbor project, and supporting
stuff.
 

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
Is it possible you are bidding the job above the spec? Putting in things you "know" they'll need, but aren't in the spec or necessary for code compliance? Sometimes we want to do the "best" job, when what the market is looking for is the "good enough" job. Or you want to head off the surprises at the pass, reduce the job friction by taking care of it up front. It took me a while to understand, but this is a really bad way to bid. We get packages all the time where some MEP firm slaps in the fire alarm system as an afterthought and you KNOW the design is wrong. Don't tinker, bid it the way you got it. The worse the spec and drawing, the less you give them. RFI only the stuff that's going to be a life/property hazard if it isn't done right. Be up front in the bid, put a disclaimer about the spec and drawing package being "true and accurate" and any extras the AHJ demands are going to be a change order. This is how other people make money, you can too. You can say it stinks, but that's the way it is.

That's great food for thought.
I don't like to get into jobs that are nothing but change orders. With some GC's it can be like pulling teeth to get a change order signed. I have seen some real dosey of contract language latey. Like : You the contractor will not hold up the job due to a change order not processed timely. Termination "without" cause the Contractor or Owner can sieze materials and tools with 24 hours notice and contractors or Owners own labor to complete the job.

How do you deal with this crap other than run , run fast away.
 

growler

Senior Member
Location
Atlanta,GA
I havent won a commercial job in a while and the company cant survive another month.

You can't lose any money on a job you don't take. Being the professional you are hopefully the owner calls you to straighten out their mess.



Who knows maybe there is more money in the service side of the business.

When you can't survive another month it's time to think about a different game plan.

Would it be possible to restructure the company as gerenator service, better cash flow.
 

LLSolutions

Senior Member
Location
Long Island, NY
Feel Your Pain

Feel Your Pain

Its tough, I too want to provide the best possible job and charge accordingly. A lot depends on the customer, and if these are relatively open bids. I get return customers who know I'm expensive but appreciate the workmanship. I get cold calls who laugh at my numbers. Somewhere in the mess there's hopefully a fair number but like what was mentioned above if they're only looking for good enough, they're not going to pay for great. FWIW hotels are notoriously cheap, most are franchises owned by investment firms and held together with duct tape and bubble gum, after working in a few i wouldn't stay there. Good Luck fighting the good fight.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
If you are including a bunch of stuff in your bids that others are not, it will be hard for you to get any business at all.

I hate nickle and dimeing customers but some of them seem to prefer to operate that way.

I just did a change notice to add a $50 power supply that included an hour of engineering time to do the paperwork. So the $50 power supply will cost the customer close to $200.
 

cowboyjwc

Moderator
Staff member
Location
Simi Valley, CA
I sometimes get calls from contractors, I know, complaining that they didn't get a job and were under bid by their material cost and I should keep an eye on the contractor doing it. Well on the code side of it, he's not going to do it any different than the other guy.

But like some of the others have said, maybe your trying to do, "too good of a job". I mean how are you getting beat by $100K?

On the other hand I used to do what we all think you might be doing, and then after I loose the job have the customer call me and tell me what the guy is billing him as extras for and then I let them know that I had all of that in my bid. And as was stated by someone else extras usually cost more than they would have if figured in originally. So what I'm getting at is while they may be bidding it at $165K it may end up being the same $265K you bid. Not that that helps any.
 

J.P.

Senior Member
Location
United States
I helped my boss work up a bid on a large city parks building. We were the second lowest bidder and were over the winning bid by 1.4 million.
I have no idea how the lowest bidder is doing that job?

Awesome deals on materials I guess.
 

69gp

Senior Member
Location
MA
Its sometimes hard losing a bid. But the way it is now everyone who has a pickup truck, a license and a roll of romex in the back of there truck consider themselves contractors. Was the winner someone new to the area or an established contractor. Did they carry the 10K for rigging did they cover all permits. These so called contractors come and go. Whoever is doing the hiring for the GC may not even be capable of DE-scoping the bids to make sure everything is the same.

Like others have said you may have overbid the specs. The low bidder may have seen a few words mixed up or reverse that totally changes the pricing and they will make it up on the other end.
 

cadpoint

Senior Member
Location
Durham, NC
How does one get other peoples numbers after a bid?

How does one get the wording of someone elses contract to a client?

Both seem odd to persue or even request in most private sector jobs!
 

mgookin

Senior Member
Location
Fort Myers, FL
How does one get other peoples numbers after a bid?

How does one get the wording of someone elses contract to a client?

Both seem odd to persue or even request in most private sector jobs!

Public sector work is normally public record after the bid is awarded.

Private sector work you'd have to know someone willing to share the info with you.
 

CT Tom

Member
Location
Connecticut USA
I had a bad habit of including above the spec, was rarely an issue when things were booming, but for the past few years that cost me a few jobs. Learned to quote to spec not above it.

Also check with your vendor, make sure you get good pricing and try and get better pricing. Small potatoes comparison but I quoted a small addition, got a quote from supply house for around $450 for the rough material (wire, boxes, few recess). In typical small builder fashion he called on a Friday night saying they were sheet rocking Monday. So in a pinch I go to the orange store, figuring I'll take a hit on the material. I pick the order and only get item for item the list, go to check out, and the amount due was $370... Had an interesting conversation with the supply house manager the following week. My numbers are a bit better now.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
There are people who are good at bidding the bare minimum required by a spec.

There are people who are good at getting materials for the lowest possible price.

There are people who are good at doing things with the least amount of labor.

If you are up against someone who can do all three (and they are out there), you will not be the low bidder unless you are that guy. Unless you screw up somehow.
 

JDBrown

Senior Member
Location
California
Occupation
Electrical Engineer
I helped my boss work up a bid on a large city parks building. We were the second lowest bidder and were over the winning bid by 1.4 million.
I have no idea how the lowest bidder is doing that job?

Awesome deals on materials I guess.
My experience is that the low bidder often has written several exclusions into his bid in hopes that the GC or customer will just look at the overall number and won't bother reading the fine print, and then he can hit them with Change Order$ later on. One example from a few years ago was a Low Voltage Contractor who excluded conduit from his bid (he was going to run all open Cat5e cables supported above the ceiling by J-hooks). Since the official bid documents called for all cables to be in conduit, this guy's bid was obviously the lowest by far, and he was awarded the job.

It was only after construction had started that the GC saw he wasn't installing conduit and found out he was planning to run open cables. That resulted in an RFI (Oh, did you want these cables to be in conduit?), which led to a nice, fat change order for the Low Voltage Contractor. The customer's representative wasn't too thrilled when he realized he could have gone with the second-lowest bidder and gotten a better-known company at a lower price if somebody had caught the low bidder's exclusion of conduit.

I recently saw a guy exclude the feeder from the existing main service to a new distribution board. I have no clue where he got the idea that that would be a good thing to do, but he did it. Maybe he's just trying to make sure he gets paid (Well, if they don't approve my change orders, they won't get any power to their new board!), but it seems kind of shady to me.

I would guess that the low bidder in your case has probably written some exclusions into his bid, and also purposely under-bid to make sure he gets the job. If that's the case, then he's planning to make up the difference (and possibly more) in Change Orders.
 

lakeview100

Member
Location
Chicago, IL
Change Orders

Change Orders

The "Underbid + Change Orders" strategy is desperate. It's not a viable long-term strategy.

Getting a Change Order approved is not a sure thing. Some owners are tough.

The LV contractor not installing conduit is typical. The GC should have scope checked on it. Now he's singing the "Low bid Blues".

Excluding the Feeder to a new Distribution Panel is shady and deceptive.
 

Fulthrotl

~Autocorrect is My Worst Enema.~
The "Underbid + Change Orders" strategy is desperate. It's not a viable long-term strategy.

Getting a Change Order approved is not a sure thing. Some owners are tough.

The LV contractor not installing conduit is typical. The GC should have scope checked on it. Now he's singing the "Low bid Blues".

Excluding the Feeder to a new Distribution Panel is shady and deceptive.


that just means that a shady and deceptive business is doing the work. :lol:

i've worked for some very large contractors who bid work flat, and the extras are where
their profit is at... and it isn't a "these are desperate times" strategy, either. it was a
common practice in the late 1980's, and there was a ton of work in this area then.

and a good GC can get around it easily. on the RTB is the simple idea, expressed in
dense legalese, that if it is on the prints, and it's part of your craft, your bid price
is to install it.

so if you don't know how to bid it, and simply exclude it, your bid won't be accepted.

and a good GC has a pretty good idea of what the work is worth, and a bid that is stupid
low won't be considered. public works projects that are simply low bidder wins, can
simply have the caveat "no exclusions" in the RTB.
 

Fordean

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
Changes

Changes

I have been losing bids lately to the lowest bidder. This has never been a problem as most people pick in the middle. For instance a 350kw diesel generator bid for a hotel in a residential neighborhood I bid at 265k. Just the generator+transfer switches, exhaust, concrete pad, engineering, and wire totaled 195k. Thats 0 labor cost in the bid yet. 2 companys bid it at 165k out the door. The only way thats possible is to take away all the extras you would need for noise and fire compliance. This has been the case alot lately my competitors are tricking the clients in the wording of the contract. I cannot sleep at night if I do that knowing its not the right thing to do or is it? I am beyond frustrated and all the blame lies on my shoulders. Any ideas on competitive bidding or any help would be greatly appreciated. I havent won a commercial job in a while and the company cant survive another month.

Another question I have are there any bid sites that I can log onto without having a project link from a GC? I want to divert money from advertising to finding GC that dont advertise?
Thanks in advance!!

Some are changing Feeders to ALuminum. They get permission somehow. And does not go to all bidders. Inside BS stuff
 
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