The Rational For Getting 3 Bids?

Ed the Roofer

Whats wrong with getting 3 bids on my project? or, Could someone please help me to not get screwed by the contractor I choose?

Dear Mr. and Mrs. Homeowner,

I would like to address the vulnerability you are subjecting yourselves to by going out and requesting 3 bids for your project.

I know what you have been told; "Go out and get at least 3 bids", and throw away the contractors bid at the bottom and the contractors bid at the top and select the one in the middle. After all, isn't that what most every single "How to Choose a Contractor Guide" suggests you do. Isn't this the only way to ensure you do not get the low ball fly by nighter or the contractor who has to charge too much to justify his overhead or just wants to make too much profit from your job?

When you decided you had a need for this particular project, did you say to yourself, "Gee, I want to make sure I get somebody who does not provide me with the full scope of work we desire (even if we do not really know what that is yet), and I also want to make sure they do not have enough experience for this type of project?

Of course you didn't!

Well, that obviously eliminates anybody who would not spend the proper amount of time with you to be able to assess your projects complete requirements, while attempting to remain within your financial means to afford this enhancement to your home.

From years upon years of experience, we have discovered that the majority of bid work, usually omits many of the necessary items that should have been included in the first place.

Do you really think that there are so many corrupt or deceitful contractors out there? Actually, no there are not. The unfortunate consequence of requiring multiple contractors to be bidding on the same project without pre-determined specifications to be met, is that most contractors feel compelled to find ways to cut corners to be able to "Win" the job. There is a necessity to "Make the Sale", no matter what the consequences. Get the job at all costs, or should I say for all lack of costs.

Well now, what will happen next, once the job starts. Heres two possible scenarios;

A) The contractor will do all of the minimal work specified in the contract, hoping that no one alerts you to the fact that additional specifications should have been included in the first place. If you never find out that some specs were ommitted, Great Job. Everybody is happy. That is until things do not work as they were intended. Did you really expect that brand new 30 year roof you put on to look good after 10-12 years? Oh, you did! How do you know if all of the manufacturers specifications or industry guidelines were followed.
But, if the building inspector approves it, doesn't that mean it was done correctly? Yes and No! The building inspector is only there to ensure that the "Minimum" specifications were followed. That means that they pass things all the time, where some contractors only do the least amount of work to just barely be on the legal side of the ordinances. Is this what you want, a "barely passed minimum standards job"?

B) On the other hand, what if you realize that the project is not advancing towards your vision you started out with? Aha, you inform the contractor that more work needs to be included in the project scope. Great!!! The contractor replies, but first, Mr. and Mrs. Homeowner, please sign these additional work change order forms. That work you now realize that you needed to have included, was not in our initial bid! We thought we were doing you a favor, by keeping the costs down for you, isn't that what you wanted?

So, what is a homeowner to do? The best that you can do is to find a contractor who is proposing to do the job 100 % the Right Way, right off the bat. Make sure that you have an open line of communication with that contractor. Make sure that they supplied you with multiple references of similar jobs they have done in your neighborhood. Make sure that you are protected by receiving copies of their workers compensation and general liability insurance certificates. Make sure they have been a licensed contractor, going by the same company name for at least 5-10 years. If you have doubts about any suggestions they have made, then have them back up their reasoning with industry related technical reports or articles.

After you have done all of this, which contractor do you now believe is going to give you the Right Job for the Right Price?

More than likely, the only one out of the original 3 bidders who even had a shot at producing the right results, was the supposedly highest priced contractor. Now, can you see that the highest bid, probably is not really the highest cost to you?

Thank You Very Much for Your Time,

Ed

dougchips

Ed, have you used it yet with any luck? I like it but it might be a little long.

ron schenker

Amen Ed

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Ed the Roofer

No, I have not used it in this format as of yet. I was just bored and am waiting for the pizza to be ready for me to pick up.

Read it out loud to yourself. and possibly condense it to fit your business, and I don't think it comes off as long as the written version seems.

I am wide open to suggestions for add or delete items to be edited. If there is a good follow through with this, we can all pick and choose what may be able to work for us.

Ed

mdshunk

That sorta reinforces the definition of the low bidder. "The guy who's wondering what he missed".

Ed the Roofer

Along thise lines about "wondering what he missed", but also puts the homeowners on a more attentative alert status, to make sure that the apples are not being compared to oranges.

It is pretty easy for someone to make things seem like they are included, when they are not. If you have seen many of your competitors bids, like I have, either, the HO is lying about the quotes being the same or they are just naive.

Ed

donb1959

I like it.

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Mike Finley

Well, if that is describing you, then you should be happy that they are getting 3 bids, you should want them to get 30 bids, the more bids they get the better chance you have of being one of them.

osborn

How does a Licensed contractor with less than 5 years in business stay in business if people shouldnt hire them?

dougchips

Use the fact that most contractors do not make it past 1 or 3 years. In ten years look back at all the people that you met that did not make it and ask yourself, should a homeowner hire someone that has not been in the business for over __years? 10 years ago I would hire someone regardless of how long they have been in business, not today.

Ed the Roofer

Osborn,

There will always be a need for the newer contractor. The points I am trying to get across to the homeowner, is that, if they are concerned about the correct application of the product they are purchasing, then they should ensure that the contractor is doing things to beat, not just meet, the minimum standards for long term functionability of there chosen product.

The other point is, that if they are being misled by the promise that many contractors offer, of an unrealistic, super long term workmanship/labor warranty, then they should ensure that the contractor has the potential for being around to satisfy those warranty obligations.

According to statistics I have read, 85 % of all new contractors go out of business within the first 5 years of operation, and over the next 5 years, 85 % of the remainder decide to fold up as well. Look at one of your own 5 year or 10 year old yelow page books and see how that compares to the contractors listed in the current version.

The way to ensure that a less than 5 year old contracting business remains healthy, is to ensure long term financial succes, continue to provide quality workmanship, and to continue learning about your chosen field you specialize in. Most importantly, further your own business knowledge, to be able to circumvent the hurdles you quite naturally wil need to overcome.

What if just one customer stiffed you for an amount of money you were not prepared to absorb. Could you remain in business until this situation got rectified? Learn from those on this and other bulletin boards, and take advantage of the wisdom from contractors who have already learned from the school of hard-knocks.

Ed

MKamis

This type of information and discussion is exactly why I read the threads here as often as possible! I have been in business 4 years now, and this is already shaping up to be my best year yet. I am faster and smarter about how I work, and I now face the challenges of running a successful business armed with a lot of great ideas and advice contributed by all of you!

Marty

RobertCDF

Great stuff Ed... I am in the middle of writing a "real" How to hire a contractor guide. That is based upon real life in MY city (not some guide from halfway across the country) I have some similar stuff in my guide but I may take a little of yours and mix it all together.

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Colorado Springs Custom Decks
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Custom Composite Decks

Ed the Roofer

Robert,

In theory, that will work great in conjuction with the previous logic spelled out in the script I wrote down.

We must always come up with newer and innovative concepts to establish a difference between premium qualifications and minimal standard qualifications.

I am looking forward to implementing my own version of a qualifying questionairre as well.

Ed

mikec

maybe some fail,because everyone says not to hire a new guy?

copusbuilder

It seems most times the new guys have to work and earn a little less to get the name out and build a base? There are always people willing to save a buck and take a chance.

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copusbuilder

Maybe even a 1000 bids!! Maybe 2000 and then we can all bid it

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Mike Finley

Did that one go over your head?

PressurePros

This board should be renamed Testosterone Planet. I have to admit the banter does crack me up.

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Ed the Roofer

To Mikec; The Points I Am Trying To Get Across ARE:

Also, Mikec;

If that is your impression of the scenario put forth, you should take the time to visit and understand your own USP, (Unique Selling Position). Base your marketing, branding, and workmanship levels on the approach that, "I must do this job better than anyone else, because my livelyhood depends on it". Not in exactly those words, but make the premise work for YOU!

The 2 ways to ensure you are around long enough to deal with long term warranty issues are;

1) Make sure the quality level is of such a high level, that the potential for a warranty issue becomes practically nill.

2) Make sure you do a good enough job, at just enough of a profit to just get by on, hoping that nothing unexpected or bad happens.

3) Make sure you plan for the future and any unexpected liabilities which may arise. Build in enough profit starting NOW, TODAY, not some time in the future, so that you can overcome these obstacles when they will occur.

I know, I said 2 ways. One of the previous 3 choices is the undesireable method. It is up to each individual to decide which manner they would like to establish as their company identity.

Ed