Jobs on bid question.

[old-iron-habit]

LOL the one I really want is way too expensive so I'll have to settle for what is affordable!

Thanks guys.

Rick

Hi Rick,
I know what you mean about expense. I got big eyes to. But by working with a contractor you may be able to put in the ground work for future improvements at a much cheaper cost by planning for them now. Nice thing about this area is that you still have a few months to plan before the dig season starts.
Stay warm,
Roger

 

[Acivil]

For my own purposes, I prefer to solicit a few hard bids, then negotiate with one of them, or someone else who I believe will provide me with the best value. I believe the final product quality suffers in a hard bid situation. Business is business, and I will spend as little time/money/man/machine hours as necessary to do an adequate job, no more no less. Hard bid affords no luxury or convenience to the bidder, nor does it buy any (above and beyond that specified). The concept of always doing the best work one is capable of is a misnomer, you get what you pay for. Concrete flatwork for instance: 2 men may be able to finish a 40 cubic yard slab pour, but they will mathematically give less attention to each yard of that concrete than a 4 man crew would, ergo their finish will likely have more imperfections than that of the 4 man crew, but if the bid market only covers the cost of 2 men, then the quality of the slab finish will likely reflect that fact... specs ultimately dictate the price, but hard bid assures that you get the bare minimum if you're dealing with a successful business.

 

[AustinM]

I wasn't looking at corruption. I was just thinking about the quality of the end product. I know that there were massive problems with the cheapest bidders doing shoddy work on military construction projects and the I was the end user on a number of items from boots to weapons systems that could have been better. What I'm asking is if I say I want this built, to these specs, within this time frame and this is the most I'm willing to spend would I maybe get a better end product?

Rick

I would have to say no because it ALL depends on what contractor you are talking to and if you trust him. The same guy that would undercut a hard bid might tell you exactly what you want to hear if you present a project to him this way as well. He might say "yeah, of course I can do that" just to get the work.

This may be too late and someone may have already suggested this, but I would talk to other people that have had similar work performed by contractors in your area and ask them their opinion of the contractor.

One thing you might try is solicit hard bids to test your budget, but do not tell anyone what you are willing to spend. If they are all over what you were willing to spend, you might reconsider what you want built or adjust your budget.

If they all come in under your budget, select whichever one has the best reputation.

 

[AustinM]

Good thread.

I'll give my perspective on the two different types of project delivery I am involved in which is hard bid and negotiated.

Hard bid - lowest bidder wins the job.

The majority of the work I do is hard bid, mostly due to the economy and the lack of an abundance of work out there. The owners want the most bang for their buck and have a lot of competition to take advantage of, as a businessman I would do the same thing.

In a hard bid situation, any change from the plans, specs and scope of work is a change order - period. There is no "we'll just take care of that" unless it is very minor and the paperwork is more work and hassle than actually doing it. That is the way it should be as the owner has taken the advantage of hard bidding the project and putting the risk on the GC and it's subs. If there is a change in the plans, specs or site conditions, they should bear the cost of the change because they chose the safety net of a hard bid. One can't have his cake and eat it too.

However, this is not a hard or fast rule either as I normally do little extra things on the project for the GC if they are good to work for and have your back. Now if the GC or owner is nickel and dime'ing me to death, there are no freebies and no extras. I play the game according to the rules the other player sets.:cool2

Negotiated work

This is the type work I prefer and not because it is more profitable but you develop a relationship with the owner/GC that leads into a steady stream of work and eliminates the hunt for the next job to bid. If an issue arises in negotiated work it is handled differently as far as change orders go. I am more willing to do a small extra or a change on a project without charging because I have a relationship that is a two way street and more work from this client coming down the pipeline.

In order for negotiated work to be successful there has to be a level of trust between the contractor and the GC/owner, which is something that doesn't happen overnight or with little effort. Now negotiated work doesn't mean "fire up the tractor and start billing hours" either. Estimates and job costs are produced for the project and the owner/GC is expecting it to be within those parameters.

Pertaining to the quality of the project in a bid vs negotiated situation, I think job quality is not nearly affected as the schedule and overall cost of the project. In a hard bid situation if the owner/GC gets an incompetent contractor it is a struggle from the beginning. With a negotiated situation, the owner/GC already knows the capability of the contractor and can plan accordingly.

This is very important with a retail project that needs to be completed at a certain time, if they aren't open they aren't making money. Most of the retail projects I work on have set opening dates and once the building permit is obtained, there are a host of pre-fabricated/manufactured items that are scheduled to be made and delivered. These items are set to be delivered and installed at a certain date come hell or high water. This can become a real issue when the project is behind schedule. Site contractors set the schedule, if you are behind just a few days getting a pad ready it sends shock waves down the schedule.

The smart owners learn quickly the values of negotiating a project and getting proven GC with proven subs to complete the project. As the work load picks up, more projects will move towards a negotiated delivery system to get the projects built.

If there was any way I could rate this post it would be at the top. 5 star, top notch, whatever you want to call it. You can make or lose more money with a pencil in your hand or how you handle yourself with owners and owners reps if you understand how a contract works and what is extra and what is not then you ever will by making a 10% increase in estimated productions. Give a little here, take a little there, it's all about choosing your battles and picking the right one to battle on that has the most money at stake. Most engineers have a pretty good handle on contracts and are very sharp, but they don't have a lot of experience in contractors budgets unless they came from the construction side. So if an an issue arises on 3 5-10k bid items and you ask for more money for extra work and they tell you no, you might want to move on and drop it. Wait for the 50k item that has a gray area that might warrant some extra money, and pick that one to battle on. In his mind, he might be thinking "well I've already told him no 3 times in a row. Maybe I'll give a little here." Chances are, you will make back whatever you lost on those other items and then some. BUT: I'm not talking about being a shyster and doing it for the sake of argument, you should only ask for extra money if you have a valid argument for doing so. It is ALL about relationships.

I know my post is off the subject, and I apologize. This subject could be an entire thread of its own titled "project management."

 

[CM1995]

This subject could be an entire thread of its own titled "project management."

I agree.

https://www.heavyequipmentforums.co...n-hard-bid-and-negotiated&p=477869#post477869