Bid Burn

mikezap

Just got a call from my prospect. I bid on 4 houses that needed siding and trim repair. 3 out of 4 proposals were almost twice what the other guy bid. His total bid on one house was lower than my material list alone. I've trimmed my OH & profit to fit the times, got the cheapest bid by suppliers around, and took a little pay cut. But cheese and crackers! Are people working for free these days?

Mike

Chris Johnson

It could one of several things

1st one being inexperience on the low guys bid.

2nd what did he miss or what is going to screw the guy on as extras?

3rd what I have done recently on projects is recommend the people have the bidders quantify there bid and scope.

By doing the 3rd item you look like the knowledgeable one on the job and if you are a little higher, your business sense lands you the project.

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Chris

AtlanticWBConst

Good answer
Good answer
Good answer
Exactly.....

To the OP - Just because someone comes in so low that their pricing is ridiculous, doesn't mean they have some "secret" to bidding and doing the work, they could simply be an idiot, a rookie, or a crook.

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D.A.S.Anthony

If you have a relatiohship with the GC/builder and it sounds like you do because you know the other guy's bids, then you should ask to take a look at the other proposals. Or maybe you did already. I he is getting the job for less than your material alone then obviously there is a bigger problem here.

You sound like you know what you are doing ie. taking a litttle less profit, outsourcing for better material pricing. If you still can't get in the same ballpark as another bidder then Yes the other person is a hack and is going to cut corners!

Maybe there is still a chance you can convince the builder or HO of this.

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slowforthecones

My dad always tells me you get what you pay for. The HO will get what they pay for. Too many hacks out there.

IHI

Time to start implenting the "unforseen changes" clause in your contract. Go and bid the job for $500, i dont care what it is, room addition, roof, siding, windows, kitchen remodel, etc.....you'll have folks coming in droves because your the cheapest guy in town....get the signature and then a few days into the job, change orders!!!!!

"I did'nt figure on j channel, foam/house wrap, tape, nails, soffit, trim coil, rotten wood, etc....i just bid the SIDING!!!! so now it's $5000 to get everything else that goes with the siding to install it

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fairfaxgc

We have seen some of the same things. Spec the material numbers, get sub bids on electrical etc., lower O&P to suit the times and then lose the job by more than 15%. It is frustrating but we can not pay for the priviledge of doing the job. Just have to move on to the next guy.

Grumpy

Suggest the guy get a 3rd quote. Push him to the direction of one of your higher priced comptitors. When he sees that you're really in the middle, hopefully he'll wake up. If not don't try being the lower bidder. Triple your profit margin and then give the customer a reason to pay ecxtra for your outstanding services, something they can only get from you... trimming your profit is something I never recommend unless you intend to go out of business sometime soon.

Keep in mind you're a lowballer too if you are cutting your prices to get jobs. In your own admission, this is what you have done.

480sparky

The low bid may also have been presented by someone 'buying' the job.

Suppose the low bidder had a killer year last year, but things are slowing down. He's anticipating things will pick up, or possibly already has work lined up that has yet to start, and wants to keep his crew. Knowing he might lose some good people if he lays them off, he dips into his savings and basically buys the job just to keep the guys busy.

It's a strategy that can work if played correctly.

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dan-o

I predict lots of desperate quotes to start off the season. Focus on landing the profitable jobs now and you'll still be around late season to clean up after the no-shows from hacks that priced themselves out of business.

mikezap

I didn't really even want the job, but it's for a friend of the family. I thought I might be a little high, but you also get what you pay for. Attention to detail. Grumpy says I'm a lowball hacker, maybe I should raise my prices.

OW! My thumb

Do what I do. Give them your card and tell the to call you when the guy either walks off the incomplete job with their money, screws it up to high hell, or they have a fit over the hidden charges.
Either way , I tell them, "Youll either pay now or youll pay a lot more later".
There is a saying......... "I dont have a problem with guys who charge less than me,.....they know what their work is worth".

pcplumber

Did you bid all your jobs for one general contractor, or were these separate customers.

If you bid all the jobs for the same contractor, he is probably just playing a game and does not want you anyway. I've seen many contractors do this just to try to beat everyone into the ground. He may actually be paying his current contractor much more than your bid, and because he does not know you, he does not want you anyway, but if he can get your price lower, he will show the other contractor your price to beat him down.

I have done this myself several times. I just completely remodeled 66 identical kitchens. My first few kitchen cabinets cost me $2600. Then my cabinet man raised the price to $3200, then to $3600, and now he is at $4200. So I am a general and think I am getting robbed. I call half a dozen cabinet companies and they tell me they want $4200 to $6500. This is same or more than I am already paying, so I tell them they are charging me too much. Why would I change cabinet companies if they both charge the same price. I exaggerate to my new cabinet companies and tell them I am paying half as much, but they will not budge, so I stick with my lie and keep my old company. Eventually, I get some fool to tell me he will do the cabinets for $3800, so I show the bid to my current guy to beat him into the ground. We squabble a little and I don't get the price lowered, but my current guy is also afraid to raise his price in the near future. The new company that quoted $3800 calls and I tell him he was still too high. He doesn't deserve the job nor the truth, anyway, because he doesn't really know what a good price is and if he charges too little I can't trust he will be around to finish a job. For many people, it is often much easier to tell someone they are too high rather than use other excuses and create an argument session. "No, I gave the job to someone else because your price was too high." It is easy!

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mikezap

The job was 4 houses in a couldesac(sp). Four different H.O.s. I got the call from one H.O. He's a nice guy, does church work with my brother. He really wanted me to get the job. His wife is prez of the H.O.A. The masonite siding on all 4 units is turning into a sponge and popping all over the place. Aprox 20 pieces of trim is cracking and needs replacement. I bid on the siding to be replaced, waterproofing, priming of new siding and trim, and designed end caps for two fascia boards that were rotting on the ends. Included in the bid was a dumpster. Galvi nails are to be used. Z bar on horizontal trim. My price was double on 3 of the units, and came close on the fourth. I marked up 15% on materials and o.h. He said if I was close he would have chosen me as he's seen my work elsewhere. But I was way over everyones budget. Heck, I wouldn't use myself either at those prices. He told me the competitors total price on his unit which was lower than my material price. I know I could has saved a little cutting material quality, lowering my wage, but I learned early on not to sell yourself short. I'm gonna do a drive by next week and see what the competition is. More than likely Samba music will be streaming out of the boom box.

TBFGhost

This is happening alot around me. New construction is coming in to remodeling so the crews can still work.

mikezap

It would take 2 guys 4-5 days to finish this job, so I doubt it was bought.

AboveAndBeyond

interesting!!! how exactly do you mean "quantify the scope?"