Up Front: What does your Bid look Like?
Contractors can spend a lot of time estimating square footage, going over the numbers and double-checking quantities and measurements to make sure they don’t miss a thing. They shop for the best prices on materials and push their crews to perform. I am amazed that with all that effort, most subcontractors have basic and simplistic bid forms.
Bidding is something every contractor does. Someone asks for an estimate on work, and you provide them a dollar figure with the explanation of what you will and won’t do. Some bids can be as simple as a verbal exchange and a handshake, while others can be quite complex, listing several options, alternatives and limitations. But no matter how simple and basic the bid, I think wall and ceiling contractors would benefit from a custom bid form tailored to their business.
SCHOOL OF HARD KNOCKSI have been a subcontractor and provided many bids on a variety of projects. My family started the contracting business years before I was born. I was fortunate to have the benefit of customized bid forms. These bid forms did not happen overnight; they were the resulting product of wisdom gained from years of being in business. Isn’t it true that we tend to learn from our mistakes better than someone simply warning us? Teenagers and new contractors are the same; they have to experience it for themselves to believe it. You try to warn them, help them and advise them. It seems to all be in vain. “You don’t understand, that was in your day” and they tune you out. I have tried to advise young contractors in the past and it feels like talking to my teenage son. They have to learn the hard way. I hope this advice may help someone.
I am not a subcontractor anymore. I now receive and review bids for projects, some are pretty big numbers, some are not. The one thing I am waiting to see is a subcontractor’s bid form like what my family’s business had.
WHAT SHOULD A BID LOOK LIKE?The bid form I think that subcontractors should have is something with an addendum on the backside that explains the site conditions that you anticipate. Over the years in business, you should start to learn a thing or two and protect yourself, beginning with a well-designed bid form. For example, consider the issue of needing to have water available to your crew on the job site. You may laugh at the unlikely prospect of being without water, but it has happened to me and will certainly happen to others. What happens if your crew shows up and there is no water to mix materials or clean with. The general contractor informs you that getting water is your problem. He further informs you that he will start the fines if you are not completed on schedule. “Yeah, yeah,” you are thinking. “My general contractors are not like that!” Well good for you right now, but someday you will run into this guy and that is when you will need all the help you can get. I had a clause on my bid form that the quoted prices were predicated on 21 items listed on the back of the bid form.
Another example is “tolerance of work.” When someone brings out the level or straight edge and starts checking walls for plumb and square, you may be in for a fight. The architect’s specifications may have tolerances that your estimator overlooked and he/she will most likely have tolerances more stringent than what is considered a recognized industry standard. The fight just got uglier and you are in trouble. How does the saying go: “You don’t bring a knife to a gunfight”? Except your problem now is that you don’t even have a knife! State the tolerance level that you can achieve in your bid and base your prices on these tolerance levels. The architect or owner may argue with you, but you will have some back-up if it goes to litigation.
Review your bid and estimate forms. Make notes after completing a project for addendum items that should be added to the back of the bid proposal. One strong item is a clause on the front stating, “The prices quoted herein are based on addendum notes on the back of our estimate and shall be considered part of the contract.” One final caveat is to make the addendum items fair. Arbitrators and mediation experts try to be fair; pulling a fast one will likely put you in a poor light and the decision will likely go against you. But if your items are fair, the mediator will recognize that and likely rule in your favor.