I have been thinking (yeah that can be dangerous ) about the current bidding situation in the construction industry. I know we have all have experienced the dreaded "low bidder" and the how in the &#^$&(@ can he do the job for that, much less make a profit reaction. There are folks out there that are bidding jobs below what the costs to do the job are - forget about making a profit they aren't even able to pay the costs to do the job with what they bid. You would think that these jacklegs would've been pushed out of business in a couple of years but there seems to be a new one to take their place. I guess there are more "bubba's with a backhoe" than I thought that are willing to work for beer money and not pay their bills. (No offense Mitch504 and Grandpa :tong) Now to the meat and potatoes. There has been a lot of shoddy low bid work that has been done over the last several years. From what I have seen this work will fail very prematurely and will need to be repaired in the near future. You get what you pay for. Eventually the economy will improve and cash will start to flow again. What I see when this happens is a "double whammy" for our industry. As new construction picks up, the crappy work over the last several years will start to fail, creating a great deal of work for the quality contractors. The owners "stung" by the lowest bid coupled with an increase in available capital will have hopefully learned their lesson and hire someone that can do a good job at a reasonable price. Reasonable meaning you can actually make at profit at the end of the job. Post your thoughts on this subject, experiences with crazy low bids or just your general frustration.:cool2
CM1995 the situation in New Zealand is the same as you stated I do not know how these guys keep going This coming season is not looking great either.Im that broke I cannot even PAY ATTENTION Regards terexkerry
the work situation i think everyone is sick of what is going on. i believe it will take along time to ever get back to where we were. the market is a mess with unqualified excavators. how do these guys get jobs when they cannot buy materials? all of their iron has been repo''ed so they go and rent. the g.c's are just as much to blame as anyone else. they don't stand up for sub's and walk all over them. plus, all of the extra insurance and additional insured and continued coverage. i have one client that tries to get the subs to do additional insured for 5 years after acceptance. just to get the job you have to be the low bid, then they tell you about all the hoops to jump through. what is going on is terrible, just when it seems like it might get better something else happens. it makes it just abput impossible to stay in business. high inusrance costs, high fuel costs, extra paperwork. i know everyone is struggling out there and alot of good people are in big trouble. my take on it is that it will end someday. i have a buddy who gave up his successful roofing company and moved to dallas. now he runs a large commercial roofinf outfit and is happier than can be. he always tells me to get out and go work for someone else. i just don't know. i have so much gear, how do you even think about that. regards, cd
ive been thinking along your buddy's line lately colo dig,, it is very hard to swallow all the illegals now that have equipment and are out there working for 1/2 what we need to get up in the am and go. kinda sick of it all after 23 years humping to make something for myself. hell i even considered a new co. motto "owned by Americans and run buy them two:usa" i have never seen so many gonzolaz, cruz, santiago, lopez named company trucks ever, not sure if this is the only problem but when my insurance co. calls and wants to talk about audit/ evaluation blah blah.... i just get sick ointhead
CONSTRUCTION TENDER PRICES APPEAR TO HAVE REACHED BOTTOM This article appeared last week..........says it all ............ CHARTERED SURVEYORS INDEX SHOW PRICES DOWN 33% FROM PEAK PRICES NOW STABILISING AT 1998 LEVELS Monday 29th August 2011. New figures from the Society of Chartered Surveyors Ireland show that construction tender prices appear to have stabilised. While tender prices have fallen dramatically over the last four years – down 33% from peak in the first half of 2007 - the latest Index shows that prices have remained unchanged from the second half of last year. It is the first time that prices have remained steady over the last four years and prices are now back to levels last seen in 1998 when the Index was first published. Andrew Nugent, Chairman of the Quantity Surveying Professional Group of the Society of Chartered Surveyors of Ireland, said “while tender prices appear to have stopped falling and may even start to increase slightly, there is still a severe shortage of work within all sectors of the construction industry and it is expected that pricing levels will remain very competitive for the foreseeable future. The graph illustrates the dramatic fall in construction tender prices which began in 2007, slowed during 2010, and now appears to have reached its floor. "Falling tender prices have been used by successive government departments as a basis for cutting investment levels in public infrastructure projects. With tender prices now stabilising, it is no longer possible to attempt to secure the same amount of work for less investment, as this will inevitably reduce the quality of the project, threaten the viability of construction firms and their sub-contractors, and promote below-cost tendering." A recent survey by the Society of Chartered Surveyors Ireland showed that over half of all tenders for construction projects are now coming in at around 17% below realistic construction costs. “Although below cost tenders may seem attractive in the short term they have long term consequences for the project, the client and the industry as a whole. We have seen this at first hand with the collapse of both companies and projects in the public and private sector’ Nugent said. The Society has recommendations for better procurement, including selecting contractors who tender realistic prices for work, rather than the lowest cost tender. The quality of the materials used and the professional standards applied throughout the project must also be considered, and assurances must be given that the contractor has the viability to ensure that the project will be completed on time and within budget and to the required standards. The Society has long called for the appointment of a chief construction advisor to work with all government bodies and agencies to oversee the planning and delivery of the public capital programme and streamline and reform the tendering and procurement process. ‘We believe such a person would be able to address issues such as value for money for the taxpayer, below cost tendering, and planning reform. There will be no winners if the current race to the bottom is allowed to continue’ Nugent conclude
While I am a one man show and do many different things to make ends meet, I still will never sell out and work for someone else for a pay check. There are many things that would be nice one each side, have worked for others a few times and always came back to being self employed. I know what you mean C D two years ago I bid a job, then found out there were many pages that they didn't show me about what they wanted. Every month they came up with another reason to hold back my money, till I met new requirements. More insurance, next month a ballon policy, that was twice what the total of all the job was. Then when I started billing them for extra's they really complained, and held up payments even more. The job super was there man and was about impossible to get along with the one of the owners of the building company was worse yet. The only thing that saved my bacon was I bid the package with total number of yards of materials. There was nothing saying they wanted it benched on a large part of the job and I had to eat that time but when it came to back fill once i hit my total bid I was able to back charge them. When the super marked something wrong and i had to dig more I back charged them. Normally I would of not been that way, but had been pushed into it. When the job was finished they held back a percentage, even though my part was done and the people they were building for were happy with my work. Then they sent out a punch list of things that were not done and many of the things they said I had not finished. Everything on the list was supplied other people that I had nothing to do with it. I was lucky that I knew the people who were getting the new building very well and walked them through showing them that the unfinished work was all done by others, mainly the builder. So the cut me a check and deducted it out of what they owed the builder. It is hard to know what the future is bringing, I have enough work for the rest of the year. Probably won't get all of it done, and have some work lined up for next spring. I really could use some help, but have been through the problems that can cause and the extra requirements just don't seem to be worth all that. Being in a small farming community helps not much fighting for work and uncutting being done. Most of what I do are smaller jobs, that are time and material, with maybe an estimate, so the people have an idea of the costs. They usually add some more work once I am there, anyway.