Recently after submitting bids to two different potential clients, I called back to see if they had made a decision, both of which chose other contractors based on lower prices. For both contracts I submitted an odd dollar amount because I suspected other contractors have been asking clients if they have received quotes before submitting their prices, and then of course they give their bids just slightly cheaper based on the clients disclosure. In both cases the other excavators quotes were exactly $250 and $500 less than the odd dollar quotes I submitted. When I am contacted about a job I try to get the quote out quickly, seems more professional and more likely to get the work. Anybody have any suggestions or personal approachs to the problem?:Banghead
If you are losing jobs to customers based on only a couple hundred dollars, then it is prolly not worth dealing with them anyway. What you need to be doing is selling your company based on quality workmanship and how quick, yet safely you can complete the project. You need to get the client to make their decision based on performance, rather than $$$$. Be careful though, don't over sell yourself. Some people get turned off by that. Another thing I do when meeting with customers. When going over the site, I ask them what they are looking for and I make suggestions on how I would do it and this way could save you money. Customers really like hearing that a contractor is trying to save them money and not trying to screw them. BTW.......what abouts in PA are you located ??
Well I think service sells itself .if you show up to start the job that is something because alot of the "cheaper" guys don't show up when they are supose to and if they do they don't do to much but bs them while they still work on other projects.One good aprouch to selling a job is giving them old customers and or referals
Johnstown area. I agree with you on selling the job based on performance and a timely schedule, safety, etc, but unless it is a repeat customer or a reference, customers are usually new faces. I would guess that every contractor has at least one good reference and uses it wisely. The quotes I submitted were fair and decent prices, to both me and the clients. I could have probably done the work for $250/$500 less, lowering the profit margin. If a job is lost fair and square, thats fine, move on, get better at bidding or watch others lose money. Competetive bidding by other contractors is what gets under my skin and I am looking for advice to reduce/eliminate it.
That's really a good idea. It sure sucks to deal with undercutters, I feel for ya.:beatsme
My dad worked the Johnstown flood in 72' doing clean up. He told me a story about how a loader operator when into a pile and when he dumped they saw a pair of legs. Here when he went into the pile, there was a girl in the pile and the operator ended up cutting the girl in half.
Live about 3 miles from where the original dam was located that failed.
What kind of work do you mainly do ??? My wife has family in Clearfield and Curwensville. We visit there about 4 or 5 times a year for holidays, birthdays and stuff.
Most anything involving dirt. 50% residential, 50%commercial/gov. Small company, by no means a heavy weight as far as quantity. Don't move snow so usually work for a HH contractor during winter. Have a few friends Clearfield way, work for Palo, IA, Hawbaker.
This problem will never go away. Your always going to have these guys out to undercut anyone. Right now more than ever. With things getting slow guys are taking work just to pay for the iron. They actually end up doing things at a loss when you figure in repairs, labor, insurance, fuel. These guys dont last long, it still sucks dealing with them. Keep going after anything you can. Your bound to pick some of it up. Show up, get the job done on time and budget. It will mean more repeat work. I worked for a guy who was always out to screw his customers. He would always try to find something so he could charge extra for. I understand, sometimes you need to if something truly extra comes up. Sometimes it pays to give something to the customer. It is way to easy to upset a customer that way, and the way things are its just too difficult to find new customers. Eventually your going to run out of new customers.
someone is using you, if its excatly that much lower, I would be very suspicious too. Dunno if they are regular companies you work for or not, but someones ethics are in question. These are not public contracts are they?
I've got a different take on it.... your potential customer is screwing himself. The whole point of taking "sealed" bids is to get the work done for the lowest price. If your client is letting your competition in on what you're bidding, and then allows them to underbid you by a thin dime, then they're not getting the full benefit of the bidding process. Your competitors won't bother turning in a low bid if they know they can do that to you later.
It isn't ethical for the buyer to reveal any info about bidding but it happens. If there are friends and or friends of friends of the buyer bidding they will probably get some inside info. I lost a nice 2 month job for a repeat customer last week to a bottom feeder with no contractors license . We need the work too.
Unlicensed contractors really steam me. It is hard enough to stay in this buisness with legitimate competition. I bet they have no insurance either, as most unlicensed ones do not. I would be thinking of an annonymous tip to the contractors board.
I can give you a little insight into my company as we are a GC/Owner. If bids are that close, we look at what is included in the price, and past performance. We are probably in the minority, but we want high quality work, and will pay a little more for it. I have actually accepted a higher bid, because they included a greater scope of work, and saw some potential change orders, and reflected that in their bid. That meant they had those changes in their original contract, and I did not have to pay the additional. In the end, those changes never happened, so there was a deduct from their contract, but that actually saved me money. Go into the bid with as much knowledge, and planning as you can. Point some things the GC/owner may not have thought about. Ask questions, and give timely responses to owners questions. Most importantly, when you get the job and you say you will be there Monday, SHOW UP!
These were basic residential jobs, one minor exc and the other a demo. Not make or break jobs, but would help pay the bills. Especially after investing the time to go look at, time to bid. I would much rather stick to sealed bids with a specific letting date and time, but that significantly reduces work and income sources. From now on I am going to tell customers the quotes are between them and myself. Maybe will help. Great point earlier about customers not getting the full benefit of the bidding process when revealing other price submissions. After the job has been awarded I usually always try to get the other quotes. Find out about lowballers, where you stand among the competition, and to simply get better at the process.
when asked for a proposal from a GC i'm not sure of, i immediately ask....what time will you be opening the bids? i want to make sure i'm on time. if they give me the "just drop it off, and i'll let you know later", story...i politely decline the bid offer while expressing my concern of having my bid shopped. they'll either be a good guy, see it my way and open them all at the same time, or have to admit they're shoppers trying to pick up the cheapest hooker on the street corner, and i don't waste my time.