Jobs on bid question.

[oldtanker]

OK, I served from 74-96, US Army. I have a lot of first hand user experience with stuff made/built by the lowest bidder.

So other than a company/local/state/fed government saving a little money does the bid system help or hurt that quality of the finished project?

I have stories but I'm just looking for opinions. Would you be able to do better work if you were just hired to do a job, submit bill and get paid or is there any real advantage to the bidding system now in place?

Or maybe they should say "this is what we want and this is our budget". Then you could look at the job and decide if you could do it and make a profit.

Rick

 

[Impact]

I seldom bid hard bid projects because I can't do it bigger better faster and cheaper than everyone else.

 

[Delmer]

does the bid system help or hurt that quality of the finished project?

"It has been said that democracy is the worst form of government except all the others that have been tried." applies just as well to competitive bidding. What would the alternative be? If you think the quality of lowest bidder is lacking, how do you think the Chinese feel about the quality of the "best connected contractor" built schools that killed thousands of students in their last earthquake?

My impression is that in the US in general there is a relatively low level of corruption and substandard building. Probably higher than Northern Europe and lower than the rest of the world.

 

[oldtanker]

"It has been said that democracy is the worst form of government except all the others that have been tried." applies just as well to competitive bidding. What would the alternative be? If you think the quality of lowest bidder is lacking, how do you think the Chinese feel about the quality of the "best connected contractor" built schools that killed thousands of students in their last earthquake?

My impression is that in the US in general there is a relatively low level of corruption and substandard building. Probably higher than Northern Europe and lower than the rest of the world.

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

 

[CM1995]

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.

 

[oldtanker]

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.

OK you are still working around the question. I didn't want to get long winded but I will share 3 examples of low bid stuff I've seen. What I'm wondering is if it had been a "this in my budget, this is what I want" how likely would these simple things have occurred.

1. Government housing project 1978. Sheet rock fell off of the walls. A 4X8 foot sheet of sheet rock held on by only 4-6 screws. This was not an isolated incident in one appt.

2. Government housing project 1995. Up stair bathtub fell through the floor because there were missing floor joist. No one was injured by just dumb luck. They were just completing the first buildings and were in the process of building a total of over 1000 units (appts). This happened in the first 2 weeks of the first 14 units being occupied.

3. Combat boot issued during the very late 60's until sometime in the 80's. Poor quality, durability was also poor and were uncomfortable enough that most soldiers opted to buy "authorized alternative" boots like German combat boots or jump boots out of their own pockets.

There are many other examples.

Rick

 

[Delmer]

I'm not saying your examples didn't happen, but the contracts I've seen are very specific, that kind of thing would not happen short of incompetence or corruption on the part of the engineer overseeing the contract and the contractor.

The military of course has much greater "flexibility" than local/state governments, and in a war zone there's no oversight. But I don't see how a "I have this much money and this is what I want" would work for any govt selecting a contractor OR establishing a price. A general dealing with a sub, or a homeowner dealing with a contractor where there's an existing relationship is a different deal.

 

[oldtanker]

OK, when they let those 2 bids out for those housing projects they knew how much money they were authorized to spend per unit by congress. So they knew their operating budget. But because of existing law they had to go through the bidding process anyway. And again, don't get me wrong. I'm not saying they should change it. What I'm wondering is could get more bang for their buck if they did it different.

I'm sure with the combat boot they issued a specification (sole, non slip, from the sole up leather, lace ECT.), accepted bids for samples and tested them by a test unit wearing these boots for most likely 90 days to 180 days (I'm betting on the 90 days). The soldiers them filled out a evaluation on the boots they wore. The "winner" was selected and the contract signed. Now I think with the problems had the contractor been cheating someone would have called them on it. Contract ran too long for it to have been corruption for that much time. Too many people involved. So if it's as I think when the problems popped up the Army (that never makes mistakes) was unwilling to admit they screwed up. But the US taxpayer, the Army and the soldier were all messed over in the long run. Would the Army been better off going to a reputable boot maker (Redwing or Danner comes to mind) And saying we need X number of boots at this price over this many years with an option to renew? Or in the case of the quarters would they have been better off going to a reputable known contractor and saying we have to have X number of quarters, built as quads, with the needed infrastructure? This is what we are willing to spend.

This again isn't knocking the bidding process. This is just wonder if it couldn't be done better.

Part of the reason I'm asking is that I'm thinking about building a shop. I'm wondering if I wouldn't be better off just calling one of the contractors I know and saying this is what I want, this is how much I'm willing to spend rather than calling 5 or 6 contractors, giving them the specs and going with the cheapest bidder.

So would I get more bang for my buck, building a 30X45 with 14 Ft sidewalls that has to take MN snow loads, insulted and wired both 110 and 220, 20 foot overhead door by just hiring a contractor or by the bidding process?


Rick

 

[joispoi]

It's the fault of whoever is overseeing the project. A simple framing inspection would have prevented that bathtub from falling through the floor.

It's not hard to make a prototype of a boot and ask a company to reproduce it. If they try to deliver a million pairs of boots that are inferior, they should be refused. If someone accepts a million pairs of inferior product, they most likely received a bribe or kickback. If a system of QC and accountability is in place, this shouldn't happen....but for some reason it still does.


The alternative is a weighted bid system like they have in France, Italy, Spain and Greece. The overall bid price is worth X%, financial health of bidder is worth Y%, experience is worth Z%, and plan of execution is worth W%.....the job always goes to whomever gives the biggest bribe to the guy in charge of the selection process.

 

[Scrub Puller]

Yair . . . any job costs what it costs.

If the work is performed by competent people working for a fair rate that is all that can be expected.

On dirt and clearing jobs I used to give an estimate or a quote and point out to the client that the quote was loaded to cover unknown contingencies.

Often times on hourly rate the job would come in even under estimate, every one is happy, follow up work next season and good advertising by word of mouth.

Oldtanker. I believe if you know a contractor it could better to work with him rather than calling in the lowest bidder . . . beware though of having work done by "mates"

CM1995. Interesting logical description of your business. I sure don't envy you blokes the task of making a dollar in what are obviously still tough times.

Cheers.

 

[oldtanker]

It's the fault of whoever is overseeing the project. A simple framing inspection would have prevented that bathtub from falling through the floor.

It's not hard to make a prototype of a boot and ask a company to reproduce it. If they try to deliver a million pairs of boots that are inferior, they should be refused. If someone accepts a million pairs of inferior product, they most likely received a bribe or kickback. If a system of QC and accountability is in place, this shouldn't happen....but for some reason it still does.


The alternative is a weighted bid system like they have in France, Italy, Spain and Greece. The overall bid price is worth X%, financial health of bidder is worth Y%, experience is worth Z%, and plan of execution is worth W%.....the job always goes to whomever gives the biggest bribe to the guy in charge of the selection process.

With as fast as those units went up I doubt and inspector could have kept up.

As far as the boots, the guy in "charge" would change for 2-3 years max. So you would be saying that boots that ran for 20 years and half that many officers and all were bribable. Sorry at lest one honest officer would have spilled the brans.

Rick

 

[joispoi]

Slowing down the speed of construction would have been exactly what was needed and would have been accomplished by an inspection program: nothing gets closed up or hidden until it's been inspected and signed off. I know of towns where the building inspector has made contractors remove sheetrock and insulation because they closed up the walls before they could inspect the framing and mechanical work. Missing floor joists and 4-6 screws per panel of sheet rock was probably just the tip of the iceberg. It's easy to go fast if they're only doing a fraction of the work.

I wouldn't think that the officers would be on the take at that level. Somebody in Washington would have gotten the kickback via generous campaign contributions and/or they would simply have bought stock in the company before they awarded them the contract.

 

[d9gdon]

It was the low bidder who sent men to the moon and returned him safely home.

 

[51kw]

I would talk to friends and neighbors that have had sheds built. Ask them who built it and what they thought of the builder. What did they think of the finished product?

 

[CM1995]

OK you are still working around the question.

Federal Gov't contracting and contracting in the private market is like comparing apples to oranges, it's a different ballgame. The only advice I can give is the perspective from the private market.

As Joispoi said, a simple framing inspection would have solved a lot of issues on the housing project. I have built units where the city inspector had to inspect the nail pattern on the sheathing before the building wrap and brick went on.:cool2

Municipal inspectors have the ability to condemn a structure they see unfit or unsafe. I don't know how the world of Federal contracting works as far as quality control/inspections go. Generally most commercial projects have secondary inspections performed by a third party testing/quality control firm in addition to municipal inspections. These are generally compaction testing, concrete testing, steel reinforcing,connections, framing and roofs.

Just from a simple liability/risk management issue I can't see how any GC would perform such shoddy work that a bathtub would fall through the floor. When I was building multi-family units we would perform our own framing inspection prior and in addition to the muni inspection.

So would I get more bang for my buck, building a 30X45 with 14 Ft sidewalls that has to take MN snow loads, insulted and wired both 110 and 220, 20 foot overhead door by just hiring a contractor or by the bidding process?

Pre-fab metal or wood framed? A pre-fab building will be easy to price out and will be a more standard building to compare prices. A wood frame building will require you to develop working drawings and a spec sheet.

You also have the option of being your own GC/project manager. Bid the project in packages - foundation, framing/building, electrical, insulation, etc.

 

[joispoi]

Somehow I missed that part about you wanting to build a shed.

The answer to getting the most bang for your buck can't be answered by bid vs. negotiated contract. Ultimately what counts is the finished product and the price that the contractor and you agree upon.

Bad news travels faster than good news. If someone has a good reputation, he's probably earned it.

 

[oldtanker]

Somehow I missed that part about you wanting to build a shed.

The answer to getting the most bang for your buck can't be answered by bid vs. negotiated contract. Ultimately what counts is the finished product and the price that the contractor and you agree upon.

Bad news travels faster than good news. If someone has a good reputation, he's probably earned it.

There was a study done back in the 90's. Not this is before social networking sites. Seems that if a person was happy with goods or service they told on the average of 3 people, if the were unsatisfied they told 10.

Now through the years I noticed that on expensive things people are less likely to admit that they were had.

Rick

 

[drummer]

Check your builder/contractor sources on similar structures and get feedback from the current owners. Find a trustworthy contractor and negotiate with him. Set schedule, price, and pay schedule. Better than the low bid process by far. Too many willing to stick you if possible. I agree with CM 1995 that having a long term reputation with your GCs (as a site contractor myself), allows give and take from both sides. As far as d9gdon and the moon shots, we also burned an Apollo crew alive on the Launch Pad during a test (with full NASA involvement). Mistakes can and will happen. Low/hard bid vs Negotiated - negotiated will be better.

 

[old-iron-habit]

If I were planning on building a shop I would talk to a few GC's that do that type of work, explain what you think you want, and ask for a design build quote. Then you can look at what they propose, what class of finishes, material they are using, foundation type and floor thickness, doors, windows, electrical service and outlet placement, and what ever else you may want. Then you can make an intelligent decision on what you want at what quality and choose your builder. What you want may or not be the lowest price but you will get what you want at a good value. Before signing a contract make sure you get there subcontractor list so you can check them out as well.
Good luck in getting the shop you really want.

 

[oldtanker]

If I were planning on building a shop I would talk to a few GC's that do that type of work, explain what you think you want, and ask for a design build quote. Then you can look at what they propose, what class of finishes, material they are using, foundation type and floor thickness, doors, windows, electrical service and outlet placement, and what ever else you may want. Then you can make an intelligent decision on what you want at what quality and choose your builder. What you want may or not be the lowest price but you will get what you want at a good value. Before signing a contract make sure you get there subcontractor list so you can check them out as well.
Good luck in getting the shop you really want.

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

Thanks guys.

Rick