Hard Bidding Construction Work

constructonomics

I've been hard bidding public projects lately and I typically work in a negotiated contract where the subcontractors are bought out in conjunction with the owner.

My question is what kind of risk am I taking by using a subs number in my bid. Suppose I get bids from three subs and take the lowest one. I then put that number in my bid to the owner and win the job. The sub then says they can't perform the work at that price and I'm left on the hook for the work. I can't get a bid bond from every sub so how can I mitigate this risk or do I just have to eat it?

Thanks,

John
www.constructonomics.com

XanadooLTD

id figure 10% on top of the lowest bid then. You could brink next bid in if need be. Add 10% on top of their bid to your bid.

Metro M & L

If you accept a bid from a sub then sign the contract with the provision that it is binding in the event that the whole project gets greenlighted. If they don't perform you can sue them for specific performance. Or you could put a penalty fee in the contract. Or both. What sub isn't going to perform; most everyone could use more work these days. Besides the whole point of the bid is to know what is going to cost to begin with.

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Metro M & L

Looking at your post a second time it looks like you want to write the proposal with the low bid and then yank it and sub in the higher because the original sub couldn't do it 'at that price'. Keeps your #'s low at the outset and then they can go higher later after the fish is hooked?

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RCPainting

Maybe instead of going with the lowest "lowballing hack" bid you could go with the mid or upper and develop a relationship with a sub that can give you reasonable numbers and follow thru!

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constructonomics

It would be nice to go with a mid-level bid, but if I did that across the board I'd never get any work.

Maybe I'm overeacting, but I'm just worried about being left high and dry. When these guys send proposals over, I doubt they are legally binding, and I can't get them under contract until I know I have the job.

John
www.constructonomics.com

HSConstruction

I never go with the low bidder, there is always a catch in the details. Check the scope of work and ask lots of questions before you choose anyone. I stick with my core group of guys who will do it right the first time. If there are a few minor unforeseens they will usually take care of it for free because I take care of them. You will not get this from the low bidder looking to raise his price to where it should have been in the first place.


Moral of the story:You get what you pay for!

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