All a Matter of Choice
Vince Bailey / March 2020
You just finished submitting a laborious proposal that took longer than your projected window. Anxious to catch up on the bid load, you hastily selected what looked like a promising opportunity from the bid calendar and began to skim. What caught your eye on first glance was encouraging—maybe a sizeable office renovation for a favored general contractor. You might make the deadline with some 12-hour days. Foregoing your usual pre-takeoff practice of thoroughly vetting the job in advance, you plunged directly into taking off numerous interior wall assemblies. You rarely take shortcuts, but a late start left you with considerable makeup time.
Frustration at the mounting ambiguities sent you back to the bid folder for some added scrutiny. To your disappointment, you had initially failed to notice there were bid invitations from two other GCs, one of whom was an unknown out-of-towner. In addition, you noted that an addendum included the note that “all existing ceiling grid and tile will remain and be repaired/replaced as needed.” In an instant, a promising opportunity had transformed into a potential bloodbath. At that point, you wisely withdrew from the bid.
Sound familiar? You probably think this applies only to these dizzying heydays, when work is so plentiful we can “pick and choose” the least risky and most likely offerings. But using sound criteria in the selection of job opportunities also applies in times of prosperity. Some of the more frequently utilized and time-tested criteria for accepting or rejecting potential bids are cited below.
Timing is everything. Most astute estimating departments maintain a monthly manpower spreadsheet or graph based on upcoming awarded work and headcount needs projected through the year. Clearly, a project schedule will be one of the most essential pieces of information in a bid folder when vetting a potential estimate. How well the start date of the framing on a project coincides with manpower needs can determine whether or not to proceed with a bid. Experience dictates that swings in manpower are detrimental to a firm’s ability to function effectively. For example, a company may have been awarded a huge anchor project that starts in six months. It is the estimator’s job, in this case, to ensure that backlog is such that adequate manpower is built and maintained up to that point in time to avoid a drastic hiring emergency. Numerous quick-hitters are the obvious sought-after awards under this scenario.
Three’s a crowd. Hard-bid jobs involving multiple GCs give pause to most discriminating estimators. It is widely understood that each GC has his favorite subs that bid all of his work. Simple math yields the inevitable conclusion that the odds of landing an award diminish with the addition of each GC to the roster. And while some drywall subs may feel more or less obligated to provide pricing to a friendly GC in this situation, negotiated work is always more preferable.
The out-of-towner. Many estimating departments tend to shy away from bidding work to unfamiliar or traveling contractors from out of the area. These “gypsy generals” are typically involved with store buildouts in mall shells, and they usually depend on a particular expanding brand, like doing all the new Old Navy stores around the country. However, the risk may be overrated with generals doing particular well-known and established name shops where the owner is obviously solvent. That, and these quick-hitters, can fill the need for maintaining manpower, as in the “timing” scenario mentioned above. Gypsy generals may not always deserve to be passed over.
Blurred vision. Nearly every set of bid docs comes with some degree of ambiguity. But when a nebulous plan set is being represented as a bid rather than a budget, alarms should go off. Unless they are helping a single GC with a design-build project, wise gatekeepers elect to wait these underdeveloped projects out, as they frequently go out to re-bid at a later date with a clearer set of developed drawings.
So far away. Many drywall subs refuse to bid any out-of-town work as a rule. Others make some exceptions, but for all bid-log decision-makers, distance is an issue. There are just too many unknown and unknowable factors. Then there are more wild-card cost issues involved with estimating distant work that a competitor may or may not calculate. And after all, does anybody want to be low-bidder on a Taco Bell in Wikieup, Ariz.?
Tick tock. Determining the amount of time needed to develop an accurate bid effectively has been hampered by ever-shrinking windows of opportunity. The expectation to stretch the resources of the estimating department thin to cover all possible prospects is clearly unreasonable. Not enough time? Sometimes it’s just wise to take a pass.
These are just a few issues that estimating gatekeepers consider when selecting projects to bid. While other factors may surely enter into vetting a potential estimate, these criteria present some pretty good rules of thumb.
Vince Bailey is an estimator/project manager working in the Phoenix area.