Dear Mason Contractors,
The summer is in full swing, the real estate and commercial markets are red hot! Municipalities are building new schools and public safety facilities. The economy is booming. I hope this finds all of you with plenty of PROFITABLE work. The key word is PROFITABLE! As you all know, there is a lot of work out there for everyone, sometimes more than you can handle.
Bid requests are coming in on a daily basis, sometimes 3 or 4 a day. Estimating Software and Database Management Software programs like ISQFT and Building Connected are blanketing the market with “Requests For Bid” or in some cases, “Requests For Budget.” I am getting “cold call” invites from general contractors that I never heard of and I am not sure how they even found me. The Internet is a mighty tool!
As an estimator, I am feeling this influx of bids as the cause of stress and many sleepless nights. Masonry Contractors sometimes employ one or more estimators who estimate and sometimes double as project managers. Picking the right projects to estimate is also a juggling game at this point in the latest construction boom. Owners of projects are employing architects at razor thin margins to put out rough and crude drawings to get an idea of what their potential project could cost. Architects are putting out schematic design drawings with limited detail. General Contractors are sending out these plans to subcontractors for quotes. After you submit your budget price, you sometimes see another one to three sets come out on the same project, often beginning a month or so after the first bid. Many times, the architect does not cloud the drawings with the changes and the estimator faces the issue of trying to find the changes. Do you spend time looking for the changes or just take it off from scratch again? This is rampant these days, as I am seeing 100% DD Drawings, 50% Drawings, GMP Drawings, Permit Sets and Constructions Sets come out on most private projects. A good percentage of these budget “do-overs” occur on multi-family apartment complexes. The owners are trying to get their projects at the lowest cost and are beating the project to death with constant changes.
Providing free budget estimating to general contractors does come at a cost to the mason contractor. If it is for a client that you do work for, then the investment is worth it. If it is for a General Contractor that you provide a lot of bids to, but never get any work for your efforts, then you may want to rethink bidding some of these projects. Some General Contractors have their favorite mason contractor that does all their work, so your chances are slim at getting work from them. They need to show owners three or more bids in each trade and your bid is just a placeholder on their spreadsheet. Even if you had a competitive estimate, a competitor who does work for that General Contractor may be given “last look” to try to meet or better your price. It is your business decision to see these trends and figure out which bidding opportunities are best for your company.
Currently, estimators are straight out with bids. Going through some of these “tire kicking” exercises gets tiring, frustrating and most importantly, costly. At the end of bidding a project 4 or 5 times, the estimator may have spent 1-2 weeks on a project at the various stages of the documents. This could cost thousands of dollars, only to be told that you were high and the project was awarded to someone else. Just when you think it’s the last round of estimating on a project, large bulletins and often revised drawings are issued. It’s a slippery slope trying to determine if you should keep putting time, effort and money into bidding a project. Sometimes, you are so far into bidding a job, that you might as well see it through to the last round, scope review and interviews. We always say the next time we will be more selective, but usually that never happens. Estimators and business owners do not need the practice of estimating. We’ve done it long enough and are good at what we do. If a certain job does not meet your business model or price structure, then it is ok to forego it and look at projects that fit your company’s vision. Again, trying to bid every project takes time away from concentrating on the ones that you have a good chance at being awarded.
Remember, only one subcontractor can do the project. While you are in business to generate work and business opportunities, you also must wisely dedicate your available resources to securing new work. Bidding every project is impossible, especially in today’s economic climate. Time is a valuable and finite resource that we have to manage carefully. There are only so many hours in the day and week to get things done efficiently. Some estimates are roads that lead to nowhere and it is an estimator’s job to see that. I have put out the idea of trying to get in on a later round of drawings. Don’t waste time on the first two or three rounds and start estimating the project once all the kinks have been worked out. Many General Contractors are also getting cute. They want prices and inform people in their invitations that “you have to bid this round in order to be invited to future rounds.” That, to me, is subtle form of bullying. Sometimes, in the end, a subcontractor that did not originally bid the project, comes out of nowhere and ends up with the job. It takes the wind out of your sail. It really lets you think the next time a project like that comes around.
Estimating is the start of the process in looking for, bidding and securing a contract for new work. You should be choosing projects to bid that you know you have a decent, fair shot at getting. If you choose the right projects to bid and give the estimator ample time to perform the quantity takeoff, then you should be able to put forth a competitive and well thought out complete estimate.
About the Author:
Domenic Livoli is President of Livoli Estimating Services, specializing in masonry estimating since 1989. To view the services that he offers to mason contractors, visit his website at www.livoli.com. To speak with Domenic regarding his estimating and consulting services, email: firstname.lastname@example.org or call 508-529-0362.