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Discussion Starter · #1 ·
So I am currently bidding on a very large project. We're talking in the $10-20M range for our part of the work. It's site prep including grading, paving, signage, landscape, concrete, etc. This project is quite a bit larger than we are used to bidding but we have assets to handle the job. What I'm looking for is advice on gross profit margin. How low should it go for a project of this size. I have always been told that the higher the over all contract value the lower the GPM. Normally we would figure all exact costs and go somewhere in the +20% range. That is for jobs of say $2M or less.
 

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Discussion Starter · #4 · (Edited)
I'm not an estimating expert. Someone else does that. Just looking for opinions from the "Peanut Gallery" and a little discussion. I guess I should also add...I'm more on the sales and client relations side of things. I'm not actually writing this bid. What I am looking for is a better understanding of what this bid should look like. So I can speak more intelligently to the client and look at it more critically before I even present it to them.
 

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Joseph A. Capece
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The percentage is dependent upon how much overhead your company has, how much profit you want to make, and a percentage for contingency. Since none of us know this information, we won't really be able to help you.
 

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Chit... half a mil is Oprah money to this country boy.

Bruno rubbed off on me. I'd under cut your azz just to under cut you:whistling:laughing::thumbup:
:laughing:

You underestimate me. Id be talking all sorts of chit about a million dollar markup and then come in at 470k with an all expense paid vacation for the prime gc...
 

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:laughing:

You underestimate me. Id be talking all sorts of chit about a million dollar markup and then come in at 470k with an all expense paid vacation for the prime gc...
I'd get fallen down drunk with the client in his yard and then see your BS and come in at 468k , all expenses paid vacation WITH hookers :thumbsup::thumbup::laughing:
 

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The Duke
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If you are in the 10-20m range, I sure as hell would find out if it was 10m...or 20m. I don't think you want to err by 10m.

You may not be an estimating expert but you better damn well find a way to get it right or you will be in a really big pile of ****.
 

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Margin

I would say after overhead, supervision, and indirect costs associated with the job are covered, your company should net 5%-7% depending on what type of job it is and how long it will take.

Allan
 

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Discussion Starter · #17 ·
The percentage is dependent upon how much overhead your company has, how much profit you want to make, and a percentage for contingency. Since none of us know this information, we won't really be able to help you.


I guess my question would be what is a permissible profit margin on something that size? Net profit after operational overhead. We don't really need a contingency percentage because that is covered in the "exceptions." IMHO
 

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Discussion Starter · #18 ·
I would say after overhead, supervision, and indirect costs associated with the job are covered, your company should net 5%-7% depending on what type of job it is and how long it will take.

Allan


That's what I am looking for. Thank you. We don't have answers to the how long/how much question yet. We just got plans yesterday. So it will take a while until we figure out all the details. My estimator is VERY good at figuring out direct costs but even he was unsure what the "volume discount" should be for a job of this size.
 

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I would not take the chance.

If you have to ask the question then you are not absolutely positive and if you are not absolutely positive then you are gambling and the risk can wipe you out

The profit for most large jobs is 3% to 8% if everything goes perfect. That means you have a maximum of 8% for error. If your error is 5% you will net 3% to zero profit.

There are too many variables that can wipe you out on big jobs like weather, delays, and a thousand things you can't think of.

Don't let jobs with large amounts get the best of your ego. The only reasons most contractors land large jobs is they are the lowest bidder, or they are best contractor that can be trusted to deliver.

I have an A General Engineer license and I have some guys working for me who are bidding jobs up to $20 million. If the time ever comes that a bid is accepted I will not proceed to enter into a contract without seeing everything very clearly and I will most-likely back out because this bidding is something I am letting them do, but I'm really not interested in getting wiped out after hearing many horror stories.

And....many of these estimators were also very good. It is too easy to miss things on blueprints.
 
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