latest bid results - analyze this

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CopperTone

Senior Member
Location
MetroWest, MA
prevailing wage job in eastern massachusetts.
Here are the bid results - first off - nine EC's bidding - holy crap - people have no work around here - look at the prices and it seems people really have no work around here. (or a bad spec - I thought it was thorough)

141,000
156,300
179,000
186,300
194,300
207,000
213,000
227,500
350,000


low bid usually wins - it was a filed sub bid - GC can pick anyone - usually goes with lowest.
But I think throw out the 2 high and 2 low and the real price for the job should be between 179,000 and 213,000.
oh yea - my bid was 207,000. I suppose I could have trimmed my price a bit - like 8k at the most - still would have gotten smoked and finished 6th.
I have been accused of lowballing here before.
 
I think you are accurate when saying that the true bid was int the neighbor hood of 179 to 213.
The low baller clearly does not know what he is doing.
The high baller, I think its safe to say , he doesn't either.
He is way off compared to the other numbers

In my opinion if you have 4 good estimators from 4 different shops. The numbers will be close.
 
This spring I had roughly the same issue. A local prevailing wage job at the university hosted the standard pre-bid walk through. Without a takeoff, I estimated the electrical at roughly $75,000. There were 13 contractors/estimators there and only 7 chairs at the table. Fortunately I was early.

Same deal, prices all over the place.

On the flip side, the head of maintenance was really excited because for the last several years they'd only average 2 or 3 bids on such a small job.
 
Low Ball

Low Ball

Here is what actually happens on some prevailing wage jobs. If the owners of the company work in the field they can bid anything they want regardless of prevailing wage. I work with my 2 sons and if we want a prevailing wage job bad enough we will low ball it simply because as owners we can get paid prevailing wage and "re-invest" a portion back into the business. Suppose I am paid $75.00 and hour per prevailing wage and I decide to invest $50.00 of that back into my company. I am infact making $25.00/ hr. Been challenged on this and won every time. You are not allowed to ask any of our workers to do this though.
 
SEO said:
The way the economy is I think you'll see a lot more bids coming in like this.
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Yes, and some of them will end up with the bonding company completing the job. Our town just had this with a water and sewer main extension project. A number of bidders with bids from $450k to $750k. The job went to the low bidder, but he folded and now the bonding company has to hire a contractor to finish the job.
 
don_resqcapt19 said:
Yes, and some of them will end up with the bonding company completing the job. Our town just had this with a water and sewer main extension project. A number of bidders with bids from $450k to $750k. The job went to the low bidder, but he folded and now the bonding company has to hire a contractor to finish the job.
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Contractors go bankrupt all the time. Sometimes in the middle of working on projects that are profitable.

Everything else being equal, I don't see much of a downside for accepting the low bid.

There is nothing to guarantee that the quality of the project will be any different based on the price. Price is just not a good indicator of quality in contracting.
 
don_resqcapt19 said:
Yes, and some of them will end up with the bonding company completing the job.
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I wonder with current financial crisis whether or not Bonding companies will be willing to bond low ballers. One of the prerequisites to getting a performance bond an a bigger job is a bid tab, they do look at the other numbers.
 
ITO said:
I wonder with current financial crisis whether or not Bonding companies will be willing to bond low ballers. One of the prerequisites to getting a performance bond an a bigger job is a bid tab, they do look at the other numbers.
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I suspect they are mostly interested in their evaluation of whether they will end up on the hook. A financially stable contractor is going to find it easier to get a bid bond than one that is less stable, regardless of the actual bid.

The place I used to work had some kind of bonding scheme in place that used letters of credit in lieu of an actual bond so they never had to actually pay for the cost of a bid bond. I never really understood it, but we never had anyone turn down the arrangement.
 
Hmmmm that sounds like an interesting idea...

Many a job has been given to the guy who was not low but could bond it.
 
don_resqcapt19 said:
The job went to the low bidder, but he folded and now the bonding company has to hire a contractor to finish the job.
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Why not the next-lowest biddeer? He's already seen the plans.
 
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