Is Public Bidding Even Worth It?
I feel like public construction bidding, especially small ones are like the minor leagues of construction projects. The pay is low, the
competition is fierce and the chances of making it big are stacked tremdously against you. Sometimes I wonder if I’m better off trying to sell lemonade on the street corner or perhaps collect tons of aluminum cans and haul them to Michigan on horseback where I can get 5 cents a can for recycling.
Over the past two years, I swear I’ve bid about thirty of these damn things, following the Swiftbonds. You fill out a bid form that has you basically sign your life away and then go up against eight to twelve other bidders. With that many bidders is it really worth getting the job? The low bidder had to have missed something. And when we are required to submit a bid bond and provide a 100% performance bond, the owner is pretty much assured that they will get their project at the price promised.
I was recently the low bid on a $360,000 job where ten general contractors provided pricing with bid bonds. The pricing ranged from $360k to $490k. $490,000! All I could think about on my way out of the room was if I screwed up or missed something. How could someone think this job would cost $490,000 and I thought it would cost $360,000?
As it turns out, I didn’t get awarded the job because they took one of the deductive alternates, in which case I was no longer the low bid. So I’ll never know if I actually could have performed the work at that price, and maybe that’s a good thing.
But if there is no money in public bidding why are so many contractors bidding the work? They must have figured out a way to keep their costs lower. It’s either that, or they just want to keep money moving through their company and keep some of their employees working. Either way, its really not the place to be when you’re actually trying to turn a profit.
I’m trying like heck to get out of the public bidding world, but I just can’t seem to shake it. Private owners have their buddies and their go-to contractors that may or may not be better. It’s just tough to muscle your way in.
could not agree more. We are still bidding these because it is just about the only work out there.
And on top of everything else, once you finally do finish, getting paid is just about impossible. More than the usual bureaucratic nonsense and mountains of paperwork, payouts are delayed over and over for nit picky little things because the governments don’t have the money.
Except for the feds, ( who car print the stuff) they are all in debt so why do we think they will pay us and not the others they owe tens of millions to?
Well you know where the jobs are going mostly to the Mexicans, this is what people are paying for they do the jobs fast.. I spoke with a guy in New Orleans he went there from Philadelphia PA, where I am from and he said dry wall is being laid for 4 to 6 dollars a sheet. Now how in the hell can anyone top that and if you want the job taped and join compounded your looking at 7 to 8 dollars a sheet.. Well I would rather stay in Philadelphia and struggle for that matter.
I started out being a finisher and I do painting jobs but I don’t let myself get stuck to one trade. So I keep busy doing other things because there is to much competition. When it comes to bidding jobs you have to consider if you are good at what you do right about now you will need to take a pay cut even if your the best and building because no one wants to take the time to do extra because that’s what all the clients want a little extra.
Public bids are just to competitive, to low of profit margins and to much work to make it worth the time and effort. I keep reading online sales and marketing articles on how service businesses should be charging top dollar for their services, but that just feels impossible when the construction business is based on giving the low guy the bid. Then the low guy goes broke and NEEDS the next job to stay afloat and bids the next job low to make sure he gets it. It is a terrible cycle.
Public bid processes are vital to the economy and eventually allow for the taxpayer and the general public to procure goods and services at a lower rate than otherwise negotiable.
Most of the impediments to pure competition are borne through the efforts of the bidding contractors to eliminate competition through enhancing specifications.
Errors will always occur in bidding, and lowest bidders will be on their own to discover the process of bonding, bidding, building, procuring, and getting paid. All of those parts of “building the job” are distinct and different.
Often enough, you can bid to compete with contractors with less knowledge in order to make more margin on your contract, buy your materials lower after the bid, and negotiate better for change orders to eventually make your intended margin. Being low bidder is only one part of the job.
The economy today has people taking jobs at cost or even less just to run revenue through their companies. It’s not uncommon to find 15 to 20 bidders at a public bid opening. As an estimator in today’s market, it’s disheartening when you pull up to a nice school project and see 50 people at the pre bid opening.
But there is a small niche of contractors that have set aside work where the competition isn’t nearly as fierce. Check out the SDVO Contractors