Afterthoughts, Part 1

Vince Bailey / December 2018

I toyed with the notion of entitling this piece, “Beware the General Contractor-Added Items in a Post-Proposal Situation,” but that would have gone to a second title line in a bold, 14-point font. Besides having an aversion to such a mouthful, I think the surreptitious one-word title teases the reader into wondering what the article is about. Now that you have an inkling of the topic, incisive bidmeisters will want to read on.
By my reckoning, the pitfalls presented by GCs in this respect fall into two categories: (1) those who insist that your proposal implies the inclusion of certain complements that he deems inherent, and (2) those who strongly suggest that you add cost for complementary scope to your proposal—additional scope with which you may not be terribly familiar.
The first of these two snares usually occurs during that dangerous period between proposal and award—that twilight zone of angst in which somewhat desperate quantifiers may be vulnerable to harmful agreements (note that even in these days of plenty, estimators may find procurement difficult due to low-bidders who bid in volume at near-cost, ignoring that time-honored adage that “pigs get fat, but hogs get slaughtered”).
Keep in mind, many GCs are quite adept at beguiling an unassuming sub into accepting some rather nebulous “informal” agreements that are usually neither incidental nor insignificant. The approach under which the GC will suggest you have included scope items that you haven’t will be friendly in tone. He will probably call you on the phone (eluding that annoying paper trail), and along with some casual small talk he’ll insert the seemingly innocuous question: “Oh, just incidentally, you did include (item x) in your number, right?” From this he hopes you will infer that the competition has carried it in his base bid, and this could be a deal-breaker. Moreover, you don’t want to look stupid. After all, this is an item you apparently missed and should have had, if your competitor included it.
So, what’s it going to be—save face and surrender a chunk of your margin in the name of good customer relations, or stand your ground, admit you didn’t have that included, and request the additional cost you are entitled to, perhaps forfeiting an award? Risky business either way, I’d say.
Before you make a choice in this dilemma, let me cite a pertinent example. I recently listened to the story from a fellow quotesmith who was bidding a project with a particularly stringent-minded GC for the first time. Having bid with this GC many times before, other bidders (myself included) were well acquainted with this GC’s regular requirements. This rather naïve quantifier, though, was unfamiliar with the term priority walls in the ITBs, as in “all priority walls to receive moisture-resistant board.” My inexperienced friend assumed priority walls (walls that must be framed and topped out prior to ductwork installation due to spatial clashes) must have meant the same thing as “wet walls,” which he did include.
Needless to say, his number was considerably lower than the competition, and when confronted with the inevitable “spider and the fly” routine over the phone, he solidly stated that he had “priority walls” included. Later, during an in-person scope review, it became clear what was meant by priority walls. Nevertheless, my friend stoically insisted he had them included rather than lose face (and maybe the job). “After all,” he thought, “how many linear feet of wall are we really talking here? Couldn’t be much.” Unfortunately, the project was a hospital tower and over half of the partitions were deemed priority walls. Live and learn.
Two ways to guard against learning a costly lesson like the one above come to mind. First and foremost, in spite of all the friendly overtures made by your prospective client, your objectives and his are by no means mutual. Always remember (and I’m constantly reminding myself) that the two of you are essentially competing for a limited resource, and your relationship is therefore fundamentally adversarial. The other comes in the form of a preemptive strike: Spend a little extra time on the scope portion of the proposal letter. Make certain that inclusions and exclusions pertain to the particular job, that they cover all possible implications, and are clearly and specifically stated. And it wouldn’t hurt to add a line that goes something like this: “Any item that is neither cited in the inclusions portion of this proposal, nor specifically noted in the contract documents, is explicitly excluded from this proposal.”
Clearly, the answer to the dilemma offered in the fifth paragraph is subject to situational factors. But I think calling attention to the possible pitfalls has some value. As they say, forewarned is forearmed.
Part two next month will deal with GCs who suggest that you add complementary scope to your proposal, at added cost.

Vince Bailey is an estimator/project manager working in the Phoenix area.