Why do Demo bids vary in price so much?

[chris pochari]

Just happened to stumble upon this bid list
https://www.co.pierce.wa.us/DocumentCenter/View/58218
The lowest bid came in at half the price of the highest bid, In construction it's rare that bids vary this much, at least in residential, don't know about commercial.
I was talking to Mark Shaurette of purdue a few years back and remember him saying that it's common for demolition bids to come in at widely different prices. Is demolition estimating inherently more difficult?
Hoping to hear from Demo pros here.

 

[CM1995]

Is demolition estimating inherently more difficult?

Yes - estimating demo is as much of an art as it is a science. Housing and wood framed structures are easy, concrete and steel frame buildings no so much.

One has to know the construction means and methods on how the building is constructed in order to price taking it down.

There are many reasons why demo bids will vary widely on a large project such as that hospital you linked -

Project experience or lack of experience with the size and type of job
Equipment available to use
Disposal arrangements and whether or not the contractor has the ability to recycle on site, owns their own landfill, etc.
Staffing - Will their own forces be used or will portions be subcontracted.
Contractor work load - if the contractor has a full plate of work they might have put a bigger number on it. If they get the job at their bid price great if not then they still have plenty of work. If a contractor needs a job then the numbers will be more aggressive.
These are just a few reasons.

I don't competitively go after single house demolition as there is always a bubba and backhoe that puts a ridiculously low price on the job, it's not worth my time.

 

[Delmer]

What world of construction are you in that bids don't vary that much? Compared to the limited experience I have with bids, those are tight. I don't do new construction, paving, excavating etc. I can see how some new construction projects will have tighter bids than demo. A relatively standard new construction home will be the same way, the experienced bidders will know what the bids will come in around and they know what they have to do to be competitive. Remodeling is a whole different story, a factor of ten isn't unusual between bids, on top of another factor of ten from the architects estimate

 

[chris pochari]

What world of construction are you in that bids don't vary that much? Compared to the limited experience I have with bids, those are tight. I don't do new construction, paving, excavating etc. I can see how some new construction projects will have tighter bids than demo. A relatively standard new construction home will be the same way, the experienced bidders will know what the bids will come in around and they know what they have to do to be competitive. Remodeling is a whole different story, a factor of ten isn't unusual between bids, on top of another factor of ten from the architects estimate

residential: I do not know the bid ranges for commercial, never worked there.
I guess when I enter the commercial world I'll get a rude awakening!

 

[Delmer]

I honestly don't know what the difference will be from residential to commercial. New construction has good plans so it's predictable. Remodeling is less predictable. Demo might be somewhere in between?

 

[chris pochari]

I honestly don't know what the difference will be from residential to commercial. New construction has good plans so it's predictable. Remodeling is less predictable. Demo might be somewhere in between?

The other thing with demolition is there is less research and studying done on the topic, you have a lot of textbooks and college programs focused on construction estimating but none on demolition. I was interested in Purdue's program on demolition and I emailed the professor and ask what textbooks they use for the estimating class and he said they used old construction estimating books, not related at all to demolition.
So if someone wants to learn how to estimating demolition you basically have to figure it out yourself!
I'd love to hear from some of the guys at North American or Brandenburg to see what formula's they have.

 

[old-iron-habit]

In my working life, building hospitals for a larger general contractor I seen a lot of bids that were all over the place. When we got a bid that was way low we always spent way more time reviewing the bid with the contractor than we did with close bids. 99% of the time the contractor had missed some major piece or multiple items and adjusted there price, often putting themselves out of the picture. It never pays to accept a low bid that can't be completed for the money and expect a quality job. You do get what you pay for. The one exception to that was a electrical subcontractor that left $890,000 on the table on a $4.5 million estimated electrical bid. We spent a full 8 hrs going over every sheet of 180 electrical sheets and all the electrical equipment with them. They had it all and provided a supt. that was by far the smartest electrical manager I every worked with. He was so far ahead of everyone is his planning and production that it was fun to watch. The owner of the company told me a few years later that they made decent money on the job. He did profess to be damn nervous when the bids become public.

 

[chris pochari]

I guess it's a bit of an eye opener for us lowly residential guys to get a glimpse of the commercial world

 

[old-iron-habit]

I guess it's a bit of an eye opener for us lowly residential guys to get a glimpse of the commercial world

Its really no different. Just bigger numbers and more expert staff to help evaluate and plan. One big screw up can hurt a big contractor real bad, same as the little guy.

 

[chris pochari]

Its really no different. Just bigger numbers and more expert staff to help evaluate and plan. One big screw up can hurt a big contractor real bad, same as the little guy.

Yeah but I'm getting the feeling residential bidding is more accurate and consistent.

 

[DARO]

I would think it is hard to track private( residential ) work. They dont typically post the bid results. Even big comercial work that is privately owned. Those numbers are not always there for you to be browseing through.

 

[old-iron-habit]

They dont typically post the bid results. Even big comercial work that is privately owned. Those numbers are not always there for you to be browseing through.

Very true. About the only time they become public is when government funds are borrowed which is quite common on rural hospitals.

 

[chris pochari]

I would think it is hard to track private( residential ) work. They dont typically post the bid results. Even big comercial work that is privately owned. Those numbers are not always there for you to be browseing through.

From personal experience in residential home building (high end) bid prices are pretty consistent.

 

[Welder Dave]

My former neighbor did a big gov't. building demolition in 1985 and needed a partner to put up the bond. The gov't had a good idea of what it would cost. I think most large demolition jobs they would have an idea how much work was involved so they could figure out a budget for having it done. Neighbor/partner had the lowest bid at $469,000 by about $30,0000. High bid was over $700,000. The gov't actually came back and asked if they wanted to reconsider and put a new bid in. They said they could do it for the bid price. (they thought it would go to a more established demo contractor if their bid was any higher) It was the neighbors first big demo job. I did some work for the neighbor on that job and he eventually was forced off the job/left and there were big lawsuits involved. I had to wait several month's to get paid as did a bunch of others including the neighbors brother. Another guy who sold a couple excavators to the neighbor had to take one back because he never got paid. There were judgements against the neighbor from the employment standards branch. They had the power to garnishee his earnings from other jobs he did until the employee's were paid. Neighbor wanted me to sign a release to get employment standards off his back. My dad was out of town and my mom apparently told the neighbors wife what she thought of the whole deal. I lived with my dad on the acreage and at about 8pm the neighbor came to our place and was threatening he could make life difficult for me! It wouldn't have happened if my dad had been home! If it did my dad would have had him charged with uttering a threat. I signed the release the next day but when my dad came home he talked with the neighbor and kind of smoothed things over. In the end a lot of it was caused by the partner the neighbor had but the bottom line was they bid too low. It got pretty ugly. It's the same job the neighbor's wife was selling salvage material and was screaming at me for taking a ride in a hoe bucket to the basement. Not normally a good idea but I was cutting steel water pipes and access holes to get copper wire out of conduit and the other alternative was to try and climb down amid tons of busted concrete with lots of rebar sticking out.

 

[Komatsu 150]

Just happened to stumble upon this bid list
https://www.co.pierce.wa.us/DocumentCenter/View/58218
The lowest bid came in at half the price of the highest bid, In construction it's rare that bids vary this much, at least in residential, don't know about commercial.
I was talking to Mark Shaurette of purdue a few years back and remember him saying that it's common for demolition bids to come in at widely different prices. Is demolition estimating inherently more difficult?
Hoping to hear from Demo pros here.

All the reasons people have said but also my personal experience. The last time (a while ago now) I bid a demo my bid was $25,000.00. I was underbid by $15,000.00. How is this possible? Well they didn't haul to an approved landfill, They took the material to an old quarry that they owned. No way to bid against that. I think this still goes on way more than people imagine.

 

[CM1995]

All the reasons people have said but also my personal experience. The last time (a while ago now) I bid a demo my bid was $25,000.00. I was underbid by $15,000.00. How is this possible? Well they didn't haul to an approved landfill, They took the material to an old quarry that they owned. No way to bid against that. I think this still goes on way more than people imagine.

You can't. Those types will continue to do such until they get caught and fined. Unfortunately there is always another one to take his place.

A local demo/roll-off company was permanently banned from having a waste hauling license by the State because they were caught too many times dumping C&D in all sorts of places. The profit margin can be nice when you don't pay dump fees...

 

[mitch504]

There is a guy here I can't bid against. He dumps stuff on land he owns. He was a city (10,000 population) cop doing it on his off days. The first time he was caught by the state, he was fined $500. The second time $1000, the third, $12,500 and charged with a misdemeanor. The city PD fired him after that conviction, but he was immediately hired as the chief of a 3-man force in a little town (250 population) that supports itself entirely off of speeding tickets. His demo bids are still below my costs.

 

[chris pochari]

There is a guy here I can't bid against. He dumps stuff on land he owns. He was a city (10,000 population) cop doing it on his off days. The first time he was caught by the state, he was fined $500. The second time $1000, the third, $12,500 and charged with a misdemeanor. The city PD fired him after that conviction, but he was immediately hired as the chief of a 3-man force in a little town (250 population) that supports itself entirely off of speeding tickets. His demo bids are still below my costs.

and that's C&D, i've heard stories of guys who own roll off companies and haul solid waste and dump it on their land!

 

[old-iron-habit]

The biggest demo contractor in this area owns the only state certified dump for many miles. Even if you underbid them you still give them a fairly big piece of the pie. They also own a few hundred construction debri boxes that they rent to sites.

 

[CM1995]

The biggest demo contractor in this area owns the only state certified dump for many miles. Even if you underbid them you still give them a fairly big piece of the pie. They also own a few hundred construction debri boxes that they rent to sites.

Veit?