I am just wondering something. How many of you folks are dropping profit margins to minimal percents to get work now in this recession? as well as dropping your hourly rates on your machinery,laborers,supers on site.etcetera? Gene
To a point I'm dropping prices, but some of the prices I've seen out there is sick. One job I bid the materials cost $150,000 I was at $365,000 for the job, someone else was $360,000 another guy came in at $160,000. Now tell me how you can pull that off?
I'm running into that a lot more lately. I worked a bid for a new park and called in just about every favor that was owed to me. There were 4 bidders. #4- $435,000 #3- $370,000 Me- $296,000 #1- $190,000 My materials were almost $170,000. I dont know how they can get away with it, other than turning in tons of change orders. I really cant afford to lower my price. I have a pretty good idea of what the job will cost and bid accordingly. Thats why I am constantly trying to develop new processes and techniques to accomplish tasks faster.
I hate that change orders game. While some change orders are inevitable to pull that BS as a way to make your only money is unscrupulous
Dualie, I couldn't agree more. That seems to be standard practice around here over the past few years on a lot of the jobs I bid on. They will see issues in the plans or the terrain and gouge on the changes. I know a lot of the times they make a heck of a lot more money by slamming the customers as a change order than bidding the job correctly. Make a fair margin, not banking on change orders, would be a great would to run a business.
My happiest day in business in a long time was the day that i watched the super kick a sub off a job for trying that stuff. The guy was known for this crap and the super (Drinking buddy of mine) knew about it. His exact words were "I fix that **** right quick) the first change order the guy presented he told them he wasn't signing it and to finish the project like he bid it. The original guy lost his rear on the job and i was brought in to finish the job right and tight and ended up making a better profit than if i had done the job like i originally bid it.
Bidding cheap is the trend here, it's a stupid game if you think about it. I handed in a bid last week on a job that requires alot of water and prep, stripping and recompacting sub grade, about a weeks work before the dirt starts to move. I suppose somebody will give that away to get the job, not me. No results yet
Dpete good luck hope you get the job.
Well one job we had to sign a document saying there would be no change orders unless authorized by the super. The scary thing is there isn't really anything to go to after the jobs done. lay everyone off bring the equipment back to the yard to work on?!? I don't know I just hope something breaks soon.
Looks like we are not the only folks bidding against fellas that are bare bones bidding. Example, we bid on the underground on a site where we did the detention pond,the pad, and the parking lot,the slab and the paving.We put very little money into the underground. Our price was for 2 weeks with an excavator, with hammer,set and install all pipes and grates. The fella that got that portion of the job bid the entire job at derned near equal what we had into for materials(pipes,grates..etc),slightly under 50 grand. I don`t see how he can even pay an operator,much less fuel for two weeks on nothing??? Strange how this business has gotten so silly when it comes to money now.We have lowered prices in small amounts to cut the fat off of bids but I don`t see how we can bid to LOSE money?????such as this guy did. Maybe he just likes paying out money so he can work????? Agreed on the change orders.Very seldom do I use a change order.If it is in the plans,that is the way we bid it.We do it as we bid.I ate about 1200 bucks on a job last week where some clearing was not done and had to be done at the end of the job.That is the estimators fault though because he didn`t figure it in.It was very small but still costs the company to have a boxblade and operator all day on that site. Change orders in my view are to be used only when a GC throws out the plans and says we want this. Using them as stated above does not go with my ethics.I would rather not make a dime and do what we said we would rather than change order someone to make money we shouldn`t have. My thing there is word of mouth.We get a lot of work because we are not unethical and I don`t want something like a change order scumbag tagged onto my name. Not saying if you use them it is bad,but they have their time and place
Work is very slow. Everyone is bidding stuff cheap. The real problem is some guys dont really know what there costs are. I just bid a job at less then 5% markup because things are slow. This doesnt even cover the 10% retainage on subs that the gc will hold. I ended up being in 3rd place. One guy was 10% less then me and the other one was 6% less then me. This was on a 1.5 million dollar job. I dont know how these guys do it for less then cost.
Bid a new 4,000 sq ft house. Dig stumps and haul out, burn brush from loggers mess. Dig, backfill, stone footers, drain tile, silt fence, install 330' of electric conduit, and 230' of 1.25" pressure sewer line, finish grade and stone driveway. $20,000 Some clown beat me for a price of $9,000. ointhead
Unbelievable..How much did you have in materials?
Not sure off hand, but I know it had to be about what he bid. I forgot to add in there, that I was digging and backfilling for the well line and importing shale for the sub-base.
Rino that is a really shame it hurts everyone in the business. A lot of homeowners don't understand the differences in bids, contractors, or insurance. General liablility, underground writer, or workmans comp.
Anymore, here it seems like when you get your bid done if you then cut that number in half, thats about what these jobs are going for. Lately, I have seen jobs go for under the cost of materials. I just hope things either start speeding up, or some of these people turning in these bids go out of business.
Pipelayer I couldn't agree more and I too Need a Vacation.....
Pipelayer I hear your pain and I agree. I picked up one today on bid opening.Small on my end but it was a decent chunk for the concrete work portion of it.Felt good that I worked it right,put enough in it for my guys to do it and still make a little on the sitework,plus help out the concrete guys in our company. On the bigger jobs sitework wise.I am wondering how any one can do a job for less than materials,testing,and the minimum amount of hours of excavation it takes to do subgrade.I have subgrades down to derned near a science and some of these guys bid low enough I can`t understand even how they have that portion of a job covered.Much less,base or fines,finish grading and final grade/backfill curb-topsoil etcetera. Some of the things I have seen are blowing my mind. I don`t understand bidding a job and ending up paying to work .,, ending up in the hole..
Hahaha I am actually going to sneak out of town for a long 4th of July weekend. Should be relaxing...I hope.
I just hate spending all this time on bids just for practice. It's very disheartening to spend a week or so on a bid to have someone come in so much lower. I agree, we're not out here to do work for free. And im damn sure not going to pay someone to do a job. Thats just crazy.
bid a storm sewer project last wk......2 yrs ago, been damn lucky to have 3 bidders....2 yrs ago, job would have went for $330-350k......11 bidders, went for $256k...to a contractor 100 miles away, with $222k worth of material on the job. this ain't over gents.
Here is my question....Can they really do the job for that price? Apples for apples?
Dogbones, I don`t see how they possibly could.One break down of any significant cost,plus machine time on the site and they busted it.....:beatsme
I'm thinking fuel, stone, asphalt, labor, wear and tear is the same so what gives. Will they cut corners? Surely there are some lowballers here "how do you do it"
alot of guys out here are using past jobs to pay for current jobs... it can only go so long. you will see guys going under in the fall. then you will get back to a little bit of normalcy in bidding. plus with home owners they just dont care...legal not legal...give them the lowest price. newest thing is they are having all contractors show up at one time like a pre-bid...its nuts cause they are only looking at price. just bid an job that required us to mill out 600 tons asphalt, replace it crack will, seal, and restripe...we brought our margins in tight and bullied our vendors for better price...our cost just for materials would have been 38k. not including trucking, or any equipment work (the mill is 4k a day 3 days of work...) winning bid...52k!
salopez that is nuts for home owners to have a pre bid. We are getting our butts handed to us here in the residential as well as the commercial in the bidding too. We are just trying to hang on I can only hope so of the low bidders will start to see some repair cost and put the hurt on them.
our last 3 jobs jave been negotiated. we have not gotten any competetive bids in quite some time. we now have a invite for a decent commercial job and they are only taking 5 excavation bids. so that will be a bit better, but some of the big guy's are really sucking wind and going in way to cheap. i think it is about low overhead and and productive payroll. no more goofin around. it is all business. the guy's dug up an unmarked secondery electric this week and i thought the worls was coming down. no, really, but we did lose all of those man hours in waiting aroung for new locates, and the g.c's are not having any change orders in these tough times. :Banghead
today i turned in a bid on moving 10-12000yds on site to build a pad, i was at 77,500. the gc told me he had a couple of bids between 65,000 and 82,000, with contractors that he had used before. but he also had 2 bids for less than 30,000. really *** ??? how in the world could you do this? we are thinking 2 loaders and 2 dumps and a compactor. 4 weeks. and it would take 4 weeks. and at just straight time and if it goes well that would be 80,000. i think if this ass gets it i am just going to go up there and watch so i can see how it is done.
It's even bad in the small potatoes market. I know of a property manger awarding a bid of $4500 to some under-the-radar clown to demo a house. Let me tell you, the debris is still all over the lot, the sidewalk is still there, including the fence, and the lot is still not to grade. Can't wait till the property manager realizes his "great deal" he got from this weekend warrior is gonna cost alot more as soon as the neighbors start bitching about all the insulation in their yard, and the unsavory types floating around their neighborhood picking through scrap.... and then the city steps in with the citations. :drinkup But you get what you pay for!
get this, 250,000yd 1 1/2 mile round trip 200,000yd dozer dirt $200k ag work the job went for $495k and the guy left $350k on the table another one there was several bids but i only remembe a few. -top bid 650k -$375 me$304 winner, $210k I had about 90k figured in for supplies as well. the job had 60day completion and here we are 6 months' later and there talking about having to start all over next spring.......i mean holy crap it was only 32,000cu yd Pj
Spoke to a QS yesterday who was pricing a job for some piling and he was told to forget about the rig hire as they owned the equipment and needed the work, so he priced it a labour, diesel ,and materials.
I'm in the fence/exc. business and just bid a gov. job: ours was $ 54,500 the award was to a guy bidding at $24,300!!!!!! My Parts alone were $19,000! Beats the heck out of me how they do that low. out of town job so gotta pay per diem too! I think they needed a tax writeoff i dont get it
just a thought, I know you guys have operating expenses , (liability, bonding ,etc) could there be an issue with excavators not complying? heck of a chance if you ask me.... myself...well I'm only small potatoes here, and I limit my work primarily to AG work, ponds, clearing, some grading, pit silos, etc etc....nothing really to bid for materials just gas oil and grease. but then when a landowner asks for a bid I tell them it's "time, labor and moving" by the hour. if they don't like it well I guess I'm just out......but it beats working for a deficit. The nice thing about working in the country is that there is not to much to worry about...call in locates..........landowner signs a comunication form for the job and check for easements if needed, check to make sure everything is above the board and then get to work....... :usa http://www.grunexlandclearing.com
Be calm..... stay the coarse. If you know what you are doing and bidding dont change anything. The biggest mistake one can make as a contractor is buying your work. It doesnt do you anygood and it surely doesnt do the industry any good. Just keep going the way you have to and be calm.
Once you estimate a job properly the only thing adjustable is your profit. I bid a masonry job block and brick on a firehouse 620,000 615,000 605,000 me 575,000 360,000 the winner :beatsme Job was prevailing wage project and the super on the job told me winner got half my usual production on the block / CMU. I know the answer cheat cheat and cheat on wages. Even then I have no clue how he will do it. When you load up on cheap work when a good job comes you can't do it. Better to sit home than work for nothing or even worse. Running equipment cost you money. When I started I did a job for 80,000 when complete I lost 4-5,000. I was green and the price was not really a loser it was in a distance area and I was young so they screwed me. Best money I ever lost because it never happen again. Figured I could have stayed home for 6 weeks and burned 5 grand in the fireplace and never left the house or got up at 4 am and home at 6 pm. I always pull from 15%-30%+ after all material and labor is paid. At it since 1975 and I have seen many come and go just flash in the pans that ruin the business. Nver leave yourself in the position where you have to work to make payments. One year I even went to work for someone in 1999 for 110,000 per year with a car and medical and was promised 20% of the profit on a company that did 12 million per year. Problem was he was losing money. I figured I would get a bill soon in the mail box for 20% of the loss! Another frind in the business spent 9 months working on a 3+ million dollar job to lose 600,000. As I looked out hi office window I showed him a brick missing on a stoop across the street. I told him if you got a buck to replace a 50 cent brick you would be 600,000 and 50 cents ahead of where you are now, Best thing is to know what you can produce by keeping good records then you are not guesstamating.
I have always been curious to know about what the average profit was for a commercial bonded excavating project (sewer, piping, etc)? We dont really do excavating in general but do play around with minor things from time to time. I know not all jobs are the same but if you have a rough average it would be interesting to know. thanks
If you ask me the pricing book seems to have been thorn up and thrown away.Companies are working now for cash turnover with no thought for the future.Wages may be the victim but I see a lot of qualified tradesmen on unemployment and the work being done by employees on min general operators rate and if they query it they are gone.
How are you personally dealing with it with your own company, Stock?
We are very quiet at present and most of the crews are on longer holidays at the moment.We plan to run a three day week for a while and review it around Easter, but with the weather playin silly buggers at present It looks like next week is a right off as well.
You are right on with the cut your best number in half......it seems as though most of my competition is leaving out the material cost. How long until they can't get materials anymore? I don't understand. Desperation is a terrible thing. I have been estimating for one year. It is really depressing to see how things are going. I don't feel comfortable with most of the bids I send out, but I generally get beat by quite a bit so the stress of loosing money is less. How does a "new-bie" survive this? The only jobs we get are invites or good-buddy deals. If we did not also have a gold mine I would have been looking for a job 6 months ago.
Im just surprised how many companies are still hanging on!
The small do it yourself companies **** any real company off. In the end they leave half the quality of workmanship you would and you most likely get asked to fix it in the end anyway. Its not only the extremely low bidders, its the people hiring someone who's 40% less then the competitors prices. They have to use some common sense and pick someone with a reasonable price. Atleast here, you aren't bound by law to pick the lowest bidder, I don't know what it is like down there.
My uncle used to be the person preparing the bids for a large concrete block company. His favorite saying was " The only thing worse than bidding too high and losing a job is bidding too low and getting it."
Yes! Hello. Yes, the good qualified operators are all on unemployment, replaced by laborers. Here in Texas the big push is for undocumented Mexicans. Only trouble is that there is the WIA, Workforce Investment Act, retraining for the bunch of us. In another month I will have completed paramedic training. I might not jump back on a machine again, at least not full time.
some.... I estimate for a smaller company, The competition is still desperate. A few have filed bankruptcy and then restructure, change their name a bit and are back at it the next day like nothing happened. Still fighting the same morons, different names.:Banghead
I resemble this remark a bit. However I "don't" do cut throat work. In my area it's the other way around the big guys are sinking there heels into our jobs. Which were the jobs that weren't worth their time to even look at a few years back. They've even fallin back into residential work at times. I personally can't compete with some one who has bulk pricing for there fuel, parts, supplies or better equipment pricing than myself. I don't have the luxury of doing work large enough to buy a machine for and pay it off on that one job. I have to survive from job to job and add them all together to make ends meet. At the same time I keep my overhead low to survive. I'll be here next year and the year after and so on. If it gets slow enough I'll take a labor job somewhere for a while. As far as there end of work they can have it. I don't want all the head ache of being big. I'll sub to a couple that I enjoy working with a side from that I'm cool with chilling at home compared to losing money or not getting payed. Because in the end I'm just out to make an honest living at something I enjoy is all nothing more nothing less. Which is what I'd like to think we were all trying to accomplish in something we enjoyed doing.
Yup... That is the only reason I go to work, if I did not have to work I would be out cutting firewood, snowmobiling, camping, hunting, building hotrods, etc, etc. I only work to support my family and my bad habits. Now a days I work to support my family, all I can afford. I have to barter and scrounge for my hobbies to flourish
These are the times we are in folks,work is being bought ,corners cut etc etc.Spoke with a drainage contractor who won a job went to start last Monday and was called into the office to be told that all they were paying e3 a meter less than he had quoted if he wanted the work at that price well and good if not they had another contractor ready to start. They were not accepting any extras ,no day rate nothing, all they will allow is the price per meter that was on the table ,any rock was BoQ rates ,mistakes were as his expense.He still took the work as there was nothing in the offing.
Ouch Its enough to make you wish you could just cut them off. No more bids. Or play along and get the price worked down to some stupid low price and then come back and say, "oh, I'm sorry, I can't do it now" . Work them and the other guys that are willing to play the game. Somedays I wish I was estimating for a GC, then I think about how it would be to not be able to sleep at night and be worried about someone breaking my legs for treating them dirty like that. I think I will stay where I am. They will get their's..... ointhead
It's not a supply and demand scenario any more or what the market cab bare. It's now a lot of people are demanded to supply or someone else will or the bear is dictating the market. I've heard of instances of people working to keep there emplooyees and not for profit. Which in some ways I can respect this. One way a fella willing to put his desire to make a profit aside so his help can feed their families. Oposed to letting everyone go and sitting back on the bank role built up by the above employees. The downside is it drives prices down in an inflated world. I've yet to see product prices drop all that much from the rises we had from the fuel price highs yet. Everything is blamed on subprime, but I don't believe that was the only player. Fuel doubled along with alot of basic needs to survive. Leaving people who were stretched thin no where to turn. Granted some didn't truely qualify for the loans and this was the end result of a chain reaction. An example three years ago I ate tuna on a regular basis. I payed about 33 cents a 6 oz can here for it. Now if you can buy it for 69 cents a can you've found a heck of a deal. No where in this time frame did my income double or even increase in the slightest. It acually went down as work was slowing down as subprime was prepairing to strike fear into the powers that be. As things slowed contractors bottom lines were starting to get pinched so they started pinching back at the subs. In my circle of work threw all these cost hikes there were never any surcharges or price hikes passed up the ladder as most subs did. One instance of this a fella I sub to now I use to be an employee for I know he never changed a rate for the better part of 8 years. He was still making a profit granted not the one he was making before, but he wasn't greedy and respected the contractor he worked for enough to honor his original prices as long as he made a profit. I saw hundred and two hundred dollar surcharge bills go across the main contractors desk for deliveres ( local deliveries ). At one point the contractor discussed letting supers that lived far away stay home a few days a week as they had company vehicles and would trim the bottom line a little. This was when things were still good 4 years ago or so. The fella I worked for and sub to now stuck by his original prices threw all of that and has managed to hold his prices. How ever he has been getting culled out of a few places he once worked in. Four years ago they were 100% of our work. Now they are about 35%. Threw all of this it boils down to as long as the main contractor made there 30% pluss profit they were happy. Trim that slightly and all respect and loyalty to those that helped produce those profits along the way are gone. Which was a learning lesson for me watching this transpire. I learned if everyone else is getting a bigger peice of the pie don't settle for the crust. Because the next time around you might not be invited to dinner. I have yet to reach in for my my slice of the pie. Not sure when I will or if I will. As long as I'm making a profit to keep me a float I can be polite and wait my turn.