How Low is Too Low?

Words: Damian LangThe economy is brutal. Bidding is tight, and you are finally the low bidder on a big job. Life is good, until you find you missed something. Do you take the job anyway?

You get the call from the general contractor (GC), who says you are low on a large project. With your backlog down, this is the break your company has been looking for, so you start high-fiving your staff. Then, the estimator turns around from his desk and says, “We have a problem. I left out the storage building with 10,000 blocks in it. We can still do the project, but it looks like we are going to take a hit if we do.”

So the scramble begins. You double-check the numbers on the entire bid, hoping there is extra money in another part of the project to make up the difference. After taking everything you can out of the project, you find you will still show a loss when the job is complete, and that’s if everything goes just right. To make matters worse, the GC is pressuring you to take the job. What do you do now? In most cases, walk away.

Now we all know there are other things to consider. Is this a GC who you always work for? And, did he tell you he was using your number and no one else’s? Or, is this a GC who shops until he finds the absolute lowest number every time? And ask yourself this: How low is too low? What do you stand to lose, and what do you stand to gain?

My company was recently low bidder on a water treatment plant that was a public opening project. We were at $1.2 million, which was $180,000 below the next bidder. We always figure a margin of 10 percent; so, normally, we would still take the project. However, being that low, we went through the project to insure all the numbers were okay before signing the contract. Guess what? We found a mistake in the estimate that, once included, put us above the next bidder. So we went through all aspects of the project to find money that could be put toward the $180,000 shortfall. Most of the numbers in the bid were hard numbers, so it just wasn’t there. I had a decision to make, and quickly: give up the job and suffer the embarrassment of backing out after being low, or take the job and take a hit. Let me tell you, it wasn’t an easy call to make.

So, what did I do? I quickly sought the advice of other contractors with whom I network in the industry. In fact, when I presented this situation to one of my contractor friends in the heat of the moment, he replied, “Don’t take the hit and wound yourself, what good are you wounded?” Then he paused and said, “Wounded animals are dangerous.” (I am not sure why he was comparing me to an animal, but being a hunter, I sure got the point.) So, I made the call to pull the bid.

I think our contractor pride gets in the way sometimes, and we forget that if you blow a bid, you can usually withdraw it. Even if it is a prime bid, you still have a limited time to pull your bid if you find you missed something in good faith. Those rules are there for a reason. Just swallow your pride, pull your bid and go after the next one. Believe me, it’s easier to swallow your pride then spend the next several months trying to recover from the grief of a bad project.
About: Featured
OSHA Releases Proposed Heat Injury and Illness Prevention Rule

On July 2, OSHA released its “Proposed Heat Injury and Illness Prevention Programs Rule” as a new, proposed standard to prevent heat illnesses and injury in indoor and outdoor settings.

By: Lily Burger
Read More
Masonry In The Media - Bradbury Building, Palace of Fine Arts, The White House, and More

Completed in 1893 in downtown Los Angeles, the Bradbury Building showcases meticulous masonry work throughout its structure, blending various materials to create a stunning visual and tactile experience.

By: Lily Burger
Read More
Marvelous Masonry - Soldier Field

Soldier Field, a Chicago landmark and one of the most iconic sports venues in the United States, demonstrates masonry's enduring strength and beauty. Opened in 1924, Soldier Field has undergone several renovations, but its original masonry work remains a

By: Cass Stern
About: 3D ModelingResidentialRestoration
Read More
Fechino Files: Applicants and Sponsors

It is the time of year when summer gets crazy, and time off, schedules, and deadlines can make for some really stressful days. However, the Masonry Apprentice Scholarship is the opposite of stress—it is just a cool way of supporting younger folks who want

By: Steven Fechino
About: 3D ModelingResidentialRestoration
Read More