GC awarded with my number, now wants to negotiate

[brantmacga]

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.

Yeh...... this is what's happened.

I spoke to my sub today. He's willing to let that part of the job go as he didn't have much profit on it. I didn't ask him to, he volunteered. 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.


Sent from my iPhone using Tapatalk

 

[Fulthrotl]

Truly our best money is made on the buyout before a single shovel is turned.

thats nice. so, i give you my best price, knowing it's going to
affect your number, affecting YOUR chance of getting the
job.

then you get the job, USING MY NUMBER, among others, and
as a matter of policy, then grind me, before we go any further.
just to see if you can shake some money out of me for free.

i'll say nothing further. i can't type and spit at the same time.

 

[mkgrady]

I would offer to deduct the cost of your subs quote but keep the markup. Keeps your profit the same.

 

[ptonsparky]

thats nice. so, i give you my best price, knowing it's going to
affect your number, affecting YOUR chance of getting the
job.

then you get the job, USING MY NUMBER, among others, and
as a matter of policy, then grind me, before we go any further.
just to see if you can shake some money out of me for free.

i'll say nothing further. i can't type and spit at the same time.

Makes you want to be his sub doesn't it?

 

[don_resqcapt19]

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.

All that means is after the first time you do that, you never get my best price up front. I will be leaving a lot of room for you to try that. In fact, often after the first time, there is no second time.

 

[ptonsparky]

All that means is after the first time you do that, you never get my best price up front. I will be leaving a lot of room for you to try that. In fact, often after the first time, there is no second time.

I don't deal with that size of jobs, not even close, but the few times I was asked to lower I told them that was my low, go ahead with another bid. Thank you.

 

[Fulthrotl]

In fact, often after the first time, there is no second time.

that was my thoughts, exactly.

of course, i could throw out a number about 2/3 of what
it should be, and then just grind *him* for whatever i
can shake out of him.

my best money might be made before i turn a shovel
as well. and it'd be fun to watch him scream.

and if he doesn't do it, then he can try to find someone
else to do it for that number. good luck with that.

i've found my worst customers are my best teachers,
and increase my profitability bigly.

 

[brantmacga]

GC awarded with my number, now wants to negotiate

I would offer to deduct the cost of your subs quote but keep the markup. Keeps your profit the same.

Yeh no O&P margins would be returned.

I've yet to call the GC back; I've got a strong inclination to not even return a full cost deduction if we do it. I left more money on the table than I'd like, so if they want to negotiate, maybe I negotiate to my favor. Actually, after writing this I've decided that's exactly what I'm going to do.

If he didn't do it already, I think it's equally fair to have the sub keep his networking profit on the fire alarm.


Sent from my iPhone using Tapatalk

 

[luckylerado]

All that means is after the first time you do that, you never get my best price up front. I will be leaving a lot of room for you to try that. In fact, often after the first time, there is no second time.

Makes you want to be his sub doesn't it?

thats nice. so, i give you my best price, knowing it's going to
affect your number, affecting YOUR chance of getting the
job.

then you get the job, USING MY NUMBER, among others, and
as a matter of policy, then grind me, before we go any further.
just to see if you can shake some money out of me for free.

i'll say nothing further. i can't type and spit at the same time.

Ahh you are all far too emotional about it. In this area you are the best value or you are not. We have great relationships with our subs and our customers. We do not screw anyone. If anything, a thorough review and a round of negotiation after award is just due diligence. Moreover it serves well to get the project handed off to the project team and allows the superintendent and project manager a real fast and effective way to get their head around the fine points of the project. Many times things are double scoped or not scoped at all or some fine print note on the drawing or VE approach creates an opportunity to put a little more in the contingency line. There is a lot going on behind the scenes at the GC office right up to the point that the bids are ripped open and many many things are missed or doubled up simply due to lack of time. Just because a GC uses your number on bid day it does not obligate them to use you even if your name is on the proposal, at that point it just means that your number is worst case. You guys probably never turn in your number a half hour before bids are due and surely always read the specification but you would be surprised at how many people come up with 100 things that they missed, overlooked or "meant to exclude" on their bid 15 minutes after a sub-contract is signed. A good second look from the GC will catch several of those things buried in the drawing or the specification that were overlooked and often there are savings there.

 

[brantmacga]

GC awarded with my number, now wants to negotiate

You guys probably never turn in your number a half hour before bids are due .....

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.



Sent from my iPhone using Tapatalk

 

[Fulthrotl]

Ahh you are all far too emotional about it. In this area you are the best value or you are not. We have great relationships with our subs and our customers.

great relationships? you just managed to get three
total strangers to decide your strategy sucks.

emotional? spare me. i'd like to see you scream
like a mashed cat when the customer grinds *you*.

you get back what you put out. enjoy the ride.

 

[mkgrady]

The bid then negotiate plan that is common leads to inflated quotes at bid time.

 

[don_resqcapt19]

... We do not screw anyone. ...

I am sorry, but bid shopping is screwing the sub. That is why we loved the projects that required the general to name the subs on the bid submission and was not permitted to change them after the fact. Even better was the state work where the electrical was a prime contractor. They would bit the mechanicals a week before they bid the general. That way the general knew the total costs of the mechanical work and added for the coordination and the general work.

 

[Strathead]

I hope I didn't miss a comment with this:

OP started by stating this is a University project. As a public institution they are usually quite careful about things that may be impropriety. The OP should contact them.

 

[kwired]

I hope I didn't miss a comment with this:

OP started by stating this is a University project. As a public institution they are usually quite careful about things that may be impropriety. The OP should contact them.

He didn't say whether it was a public or private university.

 

[Strathead]

He didn't say whether it was a public or private university.

But virtually all of them take public money and they are at least marginally careful.

 

[kwired]

But virtually all of them take public money and they are at least marginally careful.

taking voluntary public money isn't the same as being able to assess a tax on every taxpayer in the taxing district. Those taxpayers have the right to see the budget so they know how their taxes are being handled. Funds received from donations wouldn't need to have public notices to show how those funds are used. A major donor may still want to know where his money went, but isn't exactly the thing the general public is required to know about.

Getting grants or other funds from government agencies will generally have specific limitations on what those funds are used for and they don't go to any general funds accounts.

 

[kwired]

Funds taken from students for admissions, housing, etc. are not the same as taxpayer funds that go to the general budget or any donor funds that are for any specific purpose. Even publicly funded institutions get private donations (usually for specific uses) from time to time.

 

[luckylerado]

I am sorry, but bid shopping is screwing the sub.

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.

 

[kwired]

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.

I did a job last summer with several compressor units that showed up with "Trane" labels on them.

When mechanical contractor took cover off, there were accessories packed inside, one of those accessories was "Carrier" labels to stick over the Trane labels if you were a Carrier installer instead of a Trane installer:blink:

This guy thought putting that label on increased the value of the system though because of the name, he did it in a joking manner though.

BTW the "nameplate" IIRC just said "Ingersoll-Rand".