So a little venting here. We recently bid 16 "fastfood" stores, installing electric vehicle charging stations about 3 per store. Our bids included a turn key install, including concrete removal and replacement, and with chargers supplied by owner. The project was prevailing wage. We recived a response saying we were 83% high. So your telling me a 30k job can be completed for 5.1k? Just frustrating with all the hours involved in the bid process for a response like that.
Vent / Bid 83% Higher
- Thread starter Loffgren
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John120/240
Senior Member
- Location
- Olathe, Kansas
If the job is PW how can the other guy even pay for material at $5,100 ?
petersonra
Senior Member
- Location
- Northern illinois
- Occupation
- Semi-retired engineer
If your bid at $30,000 was 83% higher, the winning bid was about $16,400.
I see this kind of thing now and then. I have no idea how some companies can make money at the prices they sometimes charge compared to what we would want for the same thing. If the low bidder is very good at this type of thing and has some experience with it and knows exactly what it takes, it seems possible that he might well be able to do it for what he bid. People are not low bidding just to give the customer a deal. They are doing it to survive. Sometimes it is a bit of a gamble, but if your choice is low bid and maybe survive, or effectively no bid like you did and not survive, you may be in a position where you roll the dice.
On a couple of occasions we have been told what the bid was awarded at and it is less than our material cost. I have no idea how the "winner" can fulfill such a contract and stay in business.
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While we're on the subject, what is a reasonable tolerance band for estimates? +/- 10%? Maybe +/- 20%?
When I do a dot plot for estimates I usually get one way low, one way high and a cluster in the middle, like
0.....2.....4.....6.....8....10
.....x......x.xx...........x
(relative scale)
If he is implying that you are the high bid outlier, ask him for all the other bids. If they are all over the map then not much can be concluded with your 83% high bid.
If you are not the winning bidder I'd think him telling you is supposed to be the start of negotiations.
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KVA
Senior Member
- Location
- United States
I'm not in that league for big jobs like that yet but I would rather not hear a detailed response of denial. All I want to hear is if I have the job or not. They can keep their opinions of me being 83% "high".
Fulthrotl
~Autocorrect is My Worst Enema.~
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- E
you are indeed fortunate.... would you prefer to be a bidder in at $15k, and everyone else was $30k and up?
as noted he's not at 5k, he's about half of your bid... would you change places with him?
so, let's calculate your windfall profit.... he's half your number, so he's upside down $15,000 x 16 = $240,000.
you just made a quarter of a million dollars today, sunshine.... and you were complaining about what again?
jmellc
Senior Member
- Location
- Durham, NC
- Occupation
- Facility Maintenance Tech. Licensed Electrician
I don't know for sure, but I think some EC's may bid at a loss if they already have most of the materials on hand that are already paid for. Or maybe materials left over from a profitable job. Maybe they are bidding labor & permits only, sure that they will get the job and keep the wheels spinning a while longer.
I haven't bid jobs in your category but I recall a residential service change I bid at 2,900. Homeowner called & said low bidder was 2,450. Asked if I could match that, "because I really want you to do the work". Told him I could not do it for that & asked what his 3rd bid was. He said same as mine & he wondered how the 3rd guy could do it so much cheaper. I said, as above, that maybe he had materials on hand, willing to sell them dirt cheap, maybe he was a better bidder, maybe he lived closer to job, that maybe he bid wrong & would try to get extra $ on some technicality or other.
My last boss bid on a motel job & was told one of the big players in town bid so much lower, couldn't he match them? We both used to work for that co. and knew they would not bid that cheap. He lucked out & managed to see the bid when he visited his office. Guy went out to deal with a customer. Boss peeked at files on his desk & saw the other bid was higher than our's.
So, either way. Someone really lowballed or you may have been lied to about the bids.
I haven't bid jobs in your category but I recall a residential service change I bid at 2,900. Homeowner called & said low bidder was 2,450. Asked if I could match that, "because I really want you to do the work". Told him I could not do it for that & asked what his 3rd bid was. He said same as mine & he wondered how the 3rd guy could do it so much cheaper. I said, as above, that maybe he had materials on hand, willing to sell them dirt cheap, maybe he was a better bidder, maybe he lived closer to job, that maybe he bid wrong & would try to get extra $ on some technicality or other.
My last boss bid on a motel job & was told one of the big players in town bid so much lower, couldn't he match them? We both used to work for that co. and knew they would not bid that cheap. He lucked out & managed to see the bid when he visited his office. Guy went out to deal with a customer. Boss peeked at files on his desk & saw the other bid was higher than our's.
So, either way. Someone really lowballed or you may have been lied to about the bids.
petersonra
Senior Member
- Location
- Northern illinois
- Occupation
- Semi-retired engineer
Bid tolerance bands.
Where I used to work we did mostly capital equipment, a lot for the big A&E and utility firms.
Many of them had a practice of throwing out the low and high bidders and more or less negotiating with the remaining bidders.
Some had what they called evaluated low bidder which was supposedly the actual total cost of the project including operating cost over the projected life span of the equipment. We always suspected that was manipulated so they could buy from the bidder they wanted. Sometimes this helped us, other times it was a killer. Some places gave us a lot of credit for automated equipment that would reduce the need for operators, others would not give us any credit at all for that.
Where I used to work we did mostly capital equipment, a lot for the big A&E and utility firms.
Many of them had a practice of throwing out the low and high bidders and more or less negotiating with the remaining bidders.
Some had what they called evaluated low bidder which was supposedly the actual total cost of the project including operating cost over the projected life span of the equipment. We always suspected that was manipulated so they could buy from the bidder they wanted. Sometimes this helped us, other times it was a killer. Some places gave us a lot of credit for automated equipment that would reduce the need for operators, others would not give us any credit at all for that.
One possible response:
"Well, see, that's the problem. This is business, and business is about numbers, not desire." Then just sit and wait and see what he says.
renosteinke
Senior Member
- Location
- NE Arkansas
"Bid." Just what is a bid?
It's common for bids / quotes to be all over the map. It's rare that all the bids are for exactly the same thing.
So, it is common to find that different bids include different things. Sometimes the customer does not appreciate the differences between the bids. Let me use a recent project - air conditioning for a house - as an example. (AC laod was 2.5-3 tons)
"Low bid" would be simply sticking a window unit in several rooms. Figure 4x $300/unit, no additional electrical needed. Call it $ $1100.
Using the existing central forced-air heating system introduces the variable of whether you replace the furnace as well. Then there's the question of having a multi-speed blower. The 'low bids' proved to only allow for the cost of adding air conditioning equipment to the existing heating system, then hacking into the blower controls. The 'low bids' also had the outside unit sitting on a piece of foam board and the lines running up the side of the house. Can you say "steal me, please?" About $4K.
The highest 'central air" bid replaced the furnace with a very high efficiency one, a concrete pad, lines run under the house, and a steel cage over the outside unit. About $8K.
NONE of the central AC prices included the required servicing receptacle. Bet that leads to a fun discussion at inspection time.
The absolute highest price was for three separate mini-split units, to let different areas operate independently. Units also functioned as 'heat pumps.' Concrete pad, steel cage, lines under the house. Subpanel outside for the multiple units and service receptacle. This bid was for nearly $10K. Operating expenses were estimated to be a third to a half what the central units cost to run.
Care to guess what the customer chose to do?
Customer chose to .... go with the $10K arrangement. He'll sub out the slab. He'll have the electrician do the subpanel at the same time as he does the service change. Customer will do ALL the prep work and patching (done by the guys doing the inside remodel work). Then he'll have the mini-splits installed.
There's the key- bids can be a sale tool. We can't let things become about price alone. Saving money is a good thing, and you can point out where the customer can contribute to the job.
It's common for bids / quotes to be all over the map. It's rare that all the bids are for exactly the same thing.
So, it is common to find that different bids include different things. Sometimes the customer does not appreciate the differences between the bids. Let me use a recent project - air conditioning for a house - as an example. (AC laod was 2.5-3 tons)
"Low bid" would be simply sticking a window unit in several rooms. Figure 4x $300/unit, no additional electrical needed. Call it $ $1100.
Using the existing central forced-air heating system introduces the variable of whether you replace the furnace as well. Then there's the question of having a multi-speed blower. The 'low bids' proved to only allow for the cost of adding air conditioning equipment to the existing heating system, then hacking into the blower controls. The 'low bids' also had the outside unit sitting on a piece of foam board and the lines running up the side of the house. Can you say "steal me, please?" About $4K.
The highest 'central air" bid replaced the furnace with a very high efficiency one, a concrete pad, lines run under the house, and a steel cage over the outside unit. About $8K.
NONE of the central AC prices included the required servicing receptacle. Bet that leads to a fun discussion at inspection time.
The absolute highest price was for three separate mini-split units, to let different areas operate independently. Units also functioned as 'heat pumps.' Concrete pad, steel cage, lines under the house. Subpanel outside for the multiple units and service receptacle. This bid was for nearly $10K. Operating expenses were estimated to be a third to a half what the central units cost to run.
Care to guess what the customer chose to do?
Customer chose to .... go with the $10K arrangement. He'll sub out the slab. He'll have the electrician do the subpanel at the same time as he does the service change. Customer will do ALL the prep work and patching (done by the guys doing the inside remodel work). Then he'll have the mini-splits installed.
There's the key- bids can be a sale tool. We can't let things become about price alone. Saving money is a good thing, and you can point out where the customer can contribute to the job.
How much was the concrete/replacement worth of the $30K ?
I've been beat pretty bad on jobs like this, because we would sub any GC type work.
Having said that, if the GC you bid has seen both scopes of work (I assume you had a very detailed scope in your proposal), he knows who has it covered or not. Ask him to see the other EC's scope of work.
Chances are the other EC doesn't have scope covered. The GC is waving his price in front of you to see if you will bite.
If he won't give you your competition's scope, this likely the case.
I've been beat pretty bad on jobs like this, because we would sub any GC type work.
Having said that, if the GC you bid has seen both scopes of work (I assume you had a very detailed scope in your proposal), he knows who has it covered or not. Ask him to see the other EC's scope of work.
Chances are the other EC doesn't have scope covered. The GC is waving his price in front of you to see if you will bite.
If he won't give you your competition's scope, this likely the case.
hillbilly1
Senior Member
- Location
- North Georgia mountains
- Occupation
- Owner/electrical contractor
They probably missed the prevailing wage requirement, that would almost double their labor rate. They may pour their own pad, but if it's a prevailing wage area, I don't see that being done.
30 - 6 = 24K divided by 16 that is only $1500 for the electrical material and installation labor. That is cheap.
The lowest bidder was $16K :happysad::happysad:.
At that point my read would be you still have incomplete information. If your bid went to the GC, ime, they would just take 30% off my number and say without blinking, 'I already have a bid .7x'. I did not have that kind of money in the bid and would just walk out. When their regular guy was low I might get a call, you are x, everyone else is around you, my guy is .7 x, what did he miss.
There are some very low numbers at the base bid and if you go back later to see what they did, stuff I have seen I knew I could never break down so far as that to cheat so shamelessly on the quality of the work, omitting material, finessing changes. Lots of times the low guy is actually making low mistakes, for complicated stuff they cannot finish or the stuff does not run right. Often this is discovered way late or never. Quality of low bidders can be outrageously low. I very rarely see quality, splices in feeders and they still tear the nylon off the thhn on the wire pull, bolting onto busbars with cross theaded hardware, they install and leave stuff like that with no hesitation. Reuse of demoed damaged material.
That would be my suggestion. If you cannot talk directly to the competing low bidder for a chat, visit the job after they are done to see what they did and talk to the owners representative about their experience. Do they say nice things or claim they got screwed.
Surveyed one transformer room for a state critical data center. They knew they had problems but not what. No one would go in the room, they kept the door closed. All aluminum feeders at the trannys and they did not tighten the lug set screws. There were lengths of burned insulated wire at the lugs. No GEC's. I wrote it up. I told the manager it looked like the guy was hoping the computer would blink or hiccup when his name went through it. The raised floor area had lots of grey trough on the walls with scortch marks all over where they pinched the wire installing the covers. Stuff was in place baking.
Saw the same thing bidding in the town hall in a city an hour away. Took the main panel cover off and saw the Al feeders in the main lugs but not tightened. I put the cover back on, told them about it, and walked right out.
Sat at one bid opening to renovate 6000 sf corporate headquarters. We were told right at the bid we had 30 days no ifs ands or buts. I knew 90 to 120 days was more likely. GC bids go 145, 137, 152 and a big company bids 87. 45 days in the owner finds out everything they ordered, carpets, finishings, was another 60 days out and the job goes T and M for the GC. They stayed in there for two years and 1.4 mil renovating consecutive 5000 sf in sections at a time, probably all T + M, and changes, there were no other bidders after that.
jmellc
Senior Member
- Location
- Durham, NC
- Occupation
- Facility Maintenance Tech. Licensed Electrician
I forgot to mention that this house had a couple of dangerous j boxes in the basement, right above areas that easily flood. I figured in removing them & putting all basement eqpmt in a dry corner. I told owner this & asked if his low bidder was planning on that. He didn't know. Sad thing, he didn't really care either. Not that he wanted anyone to get hurt, but he was comparing a "maybe" accident to a "for sure" expense. I'm sure the other EC was planning to leave them in place. Bet he flunked inspection though. I had called Inspections to discuss a few details & mentioned the boxes. They said for sure to move them. In the end, I'm sure the job cost at least what I would have charged.
gadfly56
Senior Member
- Location
- New Jersey
- Occupation
- Professional Engineer, Fire & Life Safety
Not in NJ for sure, and probably not in NY either :happysad:. I was just at a seminar that had one of the head honchos from NJ Division of Wage & Hour, and he was very clear on this. If you're a one-man band, it doesn't matter. You show certified payrolls that you paid yourself prevailing or else you're looking at a $2,000 fine per instance for underpayment.
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