Who's lowballing in S Florida?

[dejeud]

OK, lately I have estimated jobs at real bottom line cost, $ 24-26/hr with 10%-15% markup and been told I'm 20%-30% too high. Now I know some is the GC bluff, but I've been bidding so low, even 10% lower I think it's suicide. So who's doing it?
Everyone complains about it, but no one wants to confess:

WHO'S LOWBALLING THE BID?

Come on, just fess up.
I know a lot of companies are trying to play the cash flow game which is something like borrow from Peter to pay Paul, but when you estimate 20-30% bellow your cost, don't you think it'll catch up with you real soon? Keep in mind, this is not something that will be resolved in a year or even two.
So again, my burning question is :
WHO DOES IT OUT THERE?
And more than anything I'd like to know:
WHAT IS YOUR LOGIC BEHIND IT?

 

[macmikeman]

When I lived there 35 years ago seemed to me everybody in the whole area was lowballing bids, and paying the men likewise. If you step outside and take a deep breath you can still smell the rubber from my tires screetching as I raced to get out of there and head west...

 

[LarryFine]

DJ, I doubt that anyone who can survive on such low bids has the time or inclination to belong to a site such as this one. :roll:

If you step outside and take a deep breath you can still smell the rubber from my tires screetching as I raced to get out of there and head west...

And he was going so fast, he skipped right across a third of the Pacific and landed in Honolulu.

 

[mcclary's electrical]

OK, lately I have estimated jobs at real bottom line cost, $ 24-26/hr with 10%-15% markup and been told I'm 20%-30% too high. Now I know some is the GC bluff, but I've been bidding so low, even 10% lower I think it's suicide. So who's doing it?
Everyone complains about it, but no one wants to confess:

WHO'S LOWBALLING THE BID?

Come on, just fess up.
I know a lot of companies are trying to play the cash flow game which is something like borrow from Peter to pay Paul, but when you estimate 20-30% bellow your cost, don't you think it'll catch up with you real soon? Keep in mind, this is not something that will be resolved in a year or even two.
So again, my burning question is :
WHO DOES IT OUT THERE?
And more than anything I'd like to know:
WHAT IS YOUR LOGIC BEHIND IT?

Just ask your GC who got the bid. And once they start, check out what they've done. It's possible they're gonna do something a different way than you. They may have figured out a way to do something cheaper. Finding this out can benefit you in two ways, if what they do is legal, that could save you money in the future. And if it's not, You can tell the GC. Chances are they're cutting corners. But I have beat guys in my area by half before. Don't get me wrong, I'm not a lowballer, what usually happens is they're gonna do it one way,,,,and I'm gonna do it another way. So even though I beat them by half,,,,I'm not there working for $20.00 an hr. like they think I am. Because what they were gonna do might take them a week, I might have a way to do it in 3 days. So don't assume you're getting beat by a lowballer, it could be your habits. But I'm just using this as a "for instance"

 

[chris kennedy]

So again, my burning question is :
WHO DOES IT OUT THERE?
And more than anything I'd like to know:
WHAT IS YOUR LOGIC BEHIND IT?

I can assure you we don't low ball, we bid to make money. I can also assure you that logic is non-existent at our shop in any form.

 

[nyerinfl]

You found me.
You bidding your jobs at $24-26 an hour makes you my lowballer as I charge quite a bit more than $26 an hour. Being that you are my competition you are lowering my earning potential. Guess I found you, why do you do it?

 

[jaylectricity]

Just ask your GC who got the bid. And once they start, check out what they've done. It's possible they're gonna do something a different way than you. They may have figured out a way to do something cheaper. Finding this out can benefit you in two ways, if what they do is legal, that could save you money in the future. And if it's not, You can tell the GC. Chances are they're cutting corners. But I have beat guys in my area by half before. Don't get me wrong, I'm not a lowballer, what usually happens is they're gonna do it one way,,,,and I'm gonna do it another way. So even though I beat them by half,,,,I'm not there working for $20.00 an hr. like they think I am. Because what they were gonna do might take them a week, I might have a way to do it in 3 days. So don't assume you're getting beat by a lowballer, it could be your habits. But I'm just using this as a "for instance"

I outbid myself on a job. I wanted to sell them a 200 amp service for $2500 plus material cost on arc-fault breakers (call me lazy for not wanting to figure out just how many they would need before pricing it out). That was too much for them. They didn't really need 200 amps it's just that I've only ever installed either 100A or 200A services. I told him I'd look into maybe a 125A or 150A service. So I did a load calculation on the house and it came to about 105.

While at his house I was looking at his panel to see what brand to buy and which breakers I could reuse to help him save. While looking at the panel I realized that it was rated for 200 amps with a backfed 100A breaker. So I sent him an email with the words, "I did some checking around and I can upgrade your service to 125A for $1400." I didn't tell him what that entailed. He liked that price and asked how much to go to 150A (ya know, just in case). I found a couple places online to buy the 150A one and I added $200. He accepted that.

So I didn't come down on a price (which makes you look bad) I just changed the job I would be doing. Instead of replacing everything, I'll just replace the feeders, the riser, the meter socket, the main breaker and the water ground.

Of course wouldn't you know it, they stopped making the 150A breaker I was going to use. So the place I ordered it from tells me he has to charge me $50 more because he did actually find one. I told him no thanks and went to the other website to order it. 5 days later I'm calling back the first guy to pay extra for the part. Oh well, it ships today.

 

[Dolfan]

A few month's ago, I was paying a bill at a local resturant when the waiter asked me if i was a EC. (The credit card gave it away) He then proceded to tell me how he and his partner had 150 men on a hi rise that had been halted because of funding from the bank. The GC owed him 600K and he had no spending money and that was his porshe in the driveway and now he is waiting tables in another part of town because he doesn't want anybody to see him etc............ EC all over town are holding weeks of men's pay because there not getting paid. These stories are always around when the housing market slows down. Until things bottom out, competition is going to be stiff. I cut out the GC game 8 months ago. The estimating dept. has been shut down. It's not worth it! There's plenty of service work for qualified people.

 

[satcom]

A few month's ago, I was paying a bill at a local resturant when the waiter asked me if i was a EC. (The credit card gave it away) He then proceded to tell me how he and his partner had 150 men on a hi rise that had been halted because of funding from the bank. The GC owed him 600K and he had no spending money and that was his porshe in the driveway and now he is waiting tables in another part of town because he doesn't want anybody to see him etc............ EC all over town are holding weeks of men's pay because there not getting paid. These stories are always around when the housing market slows down. Until things bottom out, competition is going to be stiff. I cut out the GC game 8 months ago. The estimating dept. has been shut down. It's not worth it! There's plenty of service work for qualified people.

Anyone that let's a GC get into him for that much money is not a business man, by any measure, with progress payments and third party deposits, you are assured you payments, what usually happens is some guys are in such a hurry to get a project, they go in without a binding contract and no assurance of payments, they loose their thinking ability, and GC love to latch on to these green guys, they clean their clock, even under bad economic conditions if you have something to bind the GC you can usually get paid.

 

[chris kennedy]

Anyone that let's a GC get into him for that much money is not a business man, by any measure, with progress payments and third party deposits, you are assured you payments, what usually happens is some guys are in such a hurry to get a project, they go in without a binding contract and no assurance of payments, they loose their thinking ability, and GC love to latch on to these green guys, they clean their clock, even under bad economic conditions if you have something to bind the GC you can usually get paid.

I wanted to quote just the first sentence of your post....

You don't do much government work do you?:roll: We seem to finance their projects for quite some time. Could put a smaller contractor in a bad position.

 

[satcom]

I wanted to quote just the first sentence of your post....

You don't do much government work do you?:roll: We seem to finance their projects for quite some time. Could put a smaller contractor in a bad position.[/QUOTE

Chris we do a good amount of goverment projects, and there is a big difference in a goverment contract, and dealing with a private contractor. Think about it, with a goverment contract you can get third party money to keep the ball rolling, try to obtain money on a private no secured contract.

 

[mcclary's electrical]

You found me.
You bidding your jobs at $24-26 an hour makes you my lowballer as I charge quite a bit more than $26 an hour. Being that you are my competition you are lowering my earning potential. Guess I found you, why do you do it?

Good point,,,,,sounds like he's the lowballer

 

[scwirenut]

to win a job here in SC 10k-100k you must bid your labor at 25/Man hour and $0 markup, thats right no markup.......then hope and pray politics dosnt kill you... or close down.

 

[Dolfan]

I wanted to quote just the first sentence of your post....

You don't do much government work do you?:roll: We seem to finance their projects for quite some time. Could put a smaller contractor in a bad position.

From one hurting dolfan to another, thank's for defending me Chris. I'm in contact with all types of electrical sources, I'm happy playing the waiting game. I turn jobs down every week, or refer them to friend's in the biz.

 

[RH1]

Anyone who charges less than me is a low baller, anyone who charges more is a rip off.

 

[masterinbama]

I was taught years ago that when the market slows you actually raise your rates (Labor, markup, profit ,etc..) Low balling bids to maintain volume is a death nail. In a tight market the low ball bids will be out there, underbidding those is a guaranteed loss when you sign the contract. Even though my volume is down 40% from 12 months ago actual cash profit is roughly the same. What gets me is even though our housing market is still pretty strong ,the residential EC's are still cutting each others throats.

 

[carlos cainas]

You found me.
You bidding your jobs at $24-26 an hour makes you my lowballer as I charge quite a bit more than $26 an hour. Being that you are my competition you are lowering my earning potential. Guess I found you, why do you do it?

good come back,I new things are bad out there but I dint know it was that bad. Doyle Elec Tampa FL. 79hr 50 service call.

 

[George Stolz]

...now he is waiting tables in another part of town because he doesn't want anybody to see him...

Let me get this straight. The guy is so ashamed he changes jobs and hides on the other side of town, but blows his cover the first chance he gets. That's stupid.

It must have been a GC all right...

 

[mtfallsmikey]

Anyone that let's a GC get into him for that much money is not a business man, by any measure, with progress payments and third party deposits, you are assured you payments, what usually happens is some guys are in such a hurry to get a project, they go in without a binding contract and no assurance of payments, they loose their thinking ability, and GC love to latch on to these green guys, they clean their clock, even under bad economic conditions if you have something to bind the GC you can usually get paid.

A good point for anyone with any type of contracting business, regardless of trade...My Dad got out of new residential work in the early 80's...same deal.

 

[Dolfan]

Let me get this straight. The guy is so ashamed he changes jobs and hides on the other side of town, but blows his cover the first chance he gets. That's stupid.

It must have been a GC all right...

No Georgie Boy, just like all the cops out there in Fort Collins you have it wrong. EC not GC