Question
With my relocation to the less privileged side of the tracks my high-end residential company is now trying to focus on commercial work. I recently advertised in the bluebook and on a few websites. I’m getting bids on some very large projects in my eyes but between the facelessness of a general contractor company and the lack of communication in corporate America, it seems like I’m getting nowhere.
I always get the follow up calls. "Your numbers looks good", "you seem competitive" - stuff like this boosts my confidence in thinking I may be expanding quickly, but two weeks later I’m leaving phone messages, sending emails and getting treated like a leper. I have good references in the companies I’m attempting to get involved in but it’s been happening time and time again since I got into the commercial world.
Is it just that long of a process? Do I have to wait longer to get a response? If so how long would it take for someone to get back to me with some solid information? Is it possible that my bids just aren’t cutting it? Even though I receive follow ups, or am I not meeting some hidden expectation? Am i expected to write up a detailed scope sheet for an entire hotel? Hopefully you all can help me out.
Forum Responses
(Business and Management Forum)
From contributor J:
Welcome to the world of commercial. Like anything else, meet and greets go a long way. It's time to put on your Sunday clothes and go meet the project managers. If they can associate a face with a name and if the meeting goes well, you will find that your odds go way up.
Project managers put a lot on the line whenever they award a bid. Most, although some will, don't go for the low bid. All will try and beat you down on the back side.
The point is that if they are faceless to you, then you certainly are faceless to them. Good luck. I personally know of one project manager who will send out RFQs no less than ten times before seriously considering a new contractor. His thought process is that if the guy is persistent enough to continue giving bids after six months, then he will most likely be around to finish the job he is awarded.
I do agree with some of the other posters, you need to be patient and keep submitting bids. Most of my experience is that the low bidder is the one who gets the job. We would all like to think that the contractor selected us because we are good don't kid yourself.
Another thing about this market is that you have to be very "lean" in your manufacturing, if a person is still putting their boxes together with biscuits and glue you’re not going to be very successful.
However, if we were to track only the public work that appears on the Construction Reporter or Dodge, our win rate would be about 5%. We continue to bid this work because it's usually easy to do, and we often get jobs 6 months or a year later when the low guy doesn't show up.
Once the project is bid there are a number of different things that happen. On public jobs, weeks may elapse before the job is awarded to the general contractor because of laws requiring the bids to be presented to a city, county or state governing body. If the low general bid is still over budget, there are laws, rules and procedures for negotiating, rebidding etc. that can cause delays. Once it's awarded to the general it may take weeks to get contracts processed for the finish trades because they are concentrating on getting the structural trades started. Some unscrupulous generals will shop your bid around - in private work there is nothing to prevent this, in public work most states and federal work have subcontractor listing laws to prevent this- but these are the guys you don't want to be working for anyway.
In my experience, good general contractors are looking for good subs and if you put yourself in front of them professionally and perform well, you will be given consideration over and over again.
The "faceless" people in the whole food chain make commercial a challenge to communicate. Shop drawings to a faceless architect who may be so anal that you don't think you will ever get them approved. PM's who only communicate via e-mail (to cover their tail) and who care very little about your "issues". Site supers with attitudes (to cover their tail) who insist that you install your "goods" even before windows and ceiling grid are complete.
Then there is your new role as the "banker". If you are new to commercial, consider seeking quick turn jobs. This will protect you from such things as a 50% run-up in fuel or 25% in fasteners and 8% in laminate. This will also give you a chance to review your bidding process and pricing in a very short period before bidding ground up jobs that are 12 to 15 months out.
The smaller, quicker jobs will also allow you to get to know the GC’s better before you get on the hook for a school with a scum bag. Contributor E is right that you better be very lean, especially if you are the "low bid". I would also suggest that you have access to a very good (if you can find one) installer and are prepared to pay through the nose for him.
We have a bidding success rate about = to contributor R's including the poor rate on government work. We have learned how to "work the system" when it comes to government work done directly for rather than thru a GC. Halliburton we're not but it helps to know the system. One thing that comes up often in commercial work is poorly written spec's or spec’s without full details at the time of bidding. Simple things like picking a laminate can be delayed until the last minute. This can make meeting the schedule difficult especially if you lack capacity. For those new to commercial: play it safe, keep to the smaller local jobs for a while, remember the slow pay so it doesn’t kill your business, talk to other subs about the ethics and practices of any GC you consider bidding to.
