After all, you punctually respond to their request for bid; you’re relatively sure that your pricing is competitive for your market; and you feel confident you have plenty of experienced manpower and equipment to tackle their jobs. Yet for some reason, you just don’t seem to get the work come award time.
Not getting the work is bad enough, but when you factor in all of the resources and office time eaten up during the estimating process, the return on investment pales even further — and you can’t afford to spin your wheels.
Running a contracting firm is tough enough without wasting precious hours preparing quotes that don’t deliver the necessary work. Yet if you don’t deliver estimates, you’re guaranteed not to get the work.
So what do you do?
As a subcontractor, if you can combine a program of committed client networking with an understanding of the motive forces behind the GC (who has the potential to bring you repeat work), you can greatly enhance your chances for winning the next job.
The networking part you will need to do yourself. As far as understanding where the GC is coming from, let’s take a look at a few things you can do to solidify your relationship.
1. Despite what you may have heard, most GCs do not base the decision of whether or not to choose a subcontractor on price alone.
The GC’s philosophy goes something like this: In most cases, we generate far more revenue through action (the action of building, that is) than we do dissecting 1/4% and 1/2% differences in sub quotations that are normally apples and oranges anyway.
Always, as we wade through our daily pile of subcontractor and supplier quotes, we hope in the back of our minds that the proposal we’re examining right now is the one that’s clear, complete, and competitive enough (not dirty-low, just competitive) to meet the demands of the project, allowing us to move on to our next course of more profitable endeavors.
This isn’t just rhetoric. I’m a GC and many times over the years, I’ve chosen to go with the second- or third-highest number simply because I felt more trusting and confident in their ability to get the job done.
For example, when weighing a $80,000 subcontract line item, $1,000 to $2,000 is peanuts compared to the money that would be lost for nonperformance or correction of faulty or noncomplying work.
Remember too, that it’s not just the cost of the fix that we worry about. There’s also the corresponding drop in the GC’s credibility that almost always seems to spawn other “concerns” from the project owner as the job goes along.
2. If you’re approaching a GC for the first time, work up a one-page introductory (or re-introductory if it’s simply been awhile) letter telling a little about your company.
Don’t make it too long and complex or it won’t get read. Include your current address, phone/fax numbers, principals, key people, e-mail address, and the services you offer.
Be specific about what you do. If, beside the conventional norm for your trade, you offer other services (such as a sitework contractor who also does dewatering, shoring, etc.), list it in your letter. That extra bit of information may get you the job.
3. Follow up with a phone call to the prospect (face-to-face contact is probably better, within reason — see below).
Most GC estimators keep a file, computerized or written, of subcontractors and suppliers broken down by trade and often in CSI (Construction Specification Institute) format. When a job comes up for bid, the estimator uses that file to send out bid invitations via postcards or bidfaxes to those subs and suppliers that are effected by the bid.
When making your call, a good opening line is, “It’s just been awhile since we talked. I just wanted to see if you received my letter to update my information for your subcontractor list.” Then, of course, add something new to say.
The estimator will almost never just take the info and hang up unless he’s on a bid deadline — in which case you don’t want to take up his time. Tell him you’ll catch up with him later. Conversation normally ensues and that gives you a chance to feel him out about potential work opportunities.
4. Offer to give budget numbers.
GCs work up budgets for clients all the time. Having your budget number used up front increases the odds that they’ll come back to you come hard-bid time, for the simple reason of not having to repeat a lot of information.
5. Subscribe to a reporting service like F.W. Dodge or CMD (Construction Market Data).
These reports tell of upcoming construction projects that are coming out for bid in your area. The bidding GCs are normally listed (check this again come bid time, names will have been added) and details about the project are included.
These reports also normally offer information on contract awards, work in planning stages, and negotiated work (where subcontractor proposals will be requested by one awarded GC).
Armed with information from the reports, you’ll be more knowledgeable and professional when talking with the GC. You’ll know what’s out there to bid, who’s bidding, and which GCs are getting the work.
6. Most subcontractors and suppliers (actually, most people in general) hate this one, but get out there and practice the age-old art of the cold-call. This, of course, is where you walk in unannounced just to let them know you’re around.
Yes, this can be difficult to do, but never, ever underestimate the power of social skills. I’ve seen it work too many times. Anyone, no matter how staunch and business-like they may appear, wants to work with someone they consider to be a friend. It’s simple human nature.
7. You may also pick up work just by being there.
Here’s how it works. Often, in the GC’s hectic daily grind, the importance of getting a job done “right now” far outweighs any minor advantages gained through hard bidding. You would be surprised how often (and how much) work I give away simply because the person was standing in front of me at the right time.
Now yes, I’m probably going to ask for some unit or time-materials pricing — so be armed.
8. The Proposal (Part I); I can testify that when reviewing and analyzing subcontractor proposals, there is a marked difference between the best and the worst in the bunch.
Some are professional and complete. Some are incomprehensible and illegible.
It seems fundamental, but always be sure to submit clear, whole (all pricing, including alternates), and readable bid proposals. Submit on professional letterhead and always include a phone number and contact person in case last-minute questions pop up on bid day — which they almost always do.
9. The Proposal (Part II); simply slapping a single base bid number that you’ve estimated from the plans and specifications on a page and faxing it around simply won’t do.
Today, virtually all GC bid proposals (especially larger or commercial jobs) require alternate, breakout, or unit pricing to be submitted along with the GC’s base bid. If not submitted, the GC may risk being disqualified.
Here’s your hook: The GC needs your numbers to complete this requirement. Whenever possible, get a copy of the actual bid sheet (in the spec book) that lists all required bid pricing — then go out of your way to offer assistance to the GC. It’s just one more thing that can separate you from the pack.
10. Become familiar with — and even solicit — area manufacturers, hospitals, public utilities, or any larger concern that often maintains their own construction or engineering departments.
The benefits are two-fold. You’ll not only pick up work that these concerns choose to bid direct, but you’ll also often find out about upcoming projects soon to be bid. They might even ask if you know a good GC. Pick one you like and give them a call to let them know you recommended them.
The GC would be hard-pressed to not be grateful and obligated, should the job come to fruition.