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Under bid on a job

3

37chief

Well-known Member
Location
California
I am sure I am not the only one who has ever under bid on a job. I bid 350.00 to clean up some dead limbs on one side of a lot. It didn't look like such a big job. When I got into it it turned out to go on for ever. I would cut the limbs for fire wood for my self, so that is a plus, and I would lay the lmall limbs in a row and grind them up with my woods mower. I didn't actually lose money, but lost a lot of time. My helper made 100.00. Now the real rub is the renter on the properity told me the other bid was 2,000.00 I wish he hadn't told me that, it ruined my whole day.I guess something is better than than nothing. Stan
 
it happens, some times you get bit,not so bad, you spent some extra time,it could be worse when you have to buy material to do a job and end up losing money it really can hurt
 
Yeah that sucks, been there.... done that.

I've also over-bid (way over-bid) a couple jobs I didn't want to do, and ended up with them. Makes up for screwing the pooch a few times.

It'll all work out in the end. Like Larry said, at least you didn't loose hard money.

Tim
 
I agree.

If a job looks like a can of worms you don't want to open, if you 'way overbid it and still get stuck with it, at least you're getting paid properly.
 
Bid like you don't care whether you get the job or not. I have got tired of losing money on jobs. So I bid higher, and don't do 1 extra thing, that ain't in the proposal!
 
Same thing I'm doing this year, not as many jobs but I not loseing money. got tired of draging round though the mud for peenuts
 
A good friend is a real good masonry man. He lays natural stone on these real fancy houses. Two years ago he had worked 46 days straight trying to get caught up. His wife was giving him cane about never being home. So he started adding thirty percent extra to his bids. Some of these houses have 200k is rock work. He still got most of the jobs. His wife quit complaining as she went to the bank. LMAO

He still is swamped with work. His biggest problem is finding help. He says very few under 35-40 are worth hiring. He pays good money too but it is hard manual work. His Dad is seventy-four years old. He just lays bricks any more says they are lighter than the natural rocks. The OLD guy will lay 800-1000 bricks each day. I think that is pretty good for being 74.
 
Live and learn. Been decades since I heard the name of the original general contractor on the Sears tower, but went broke over building the Sears tower because forgot to factor in freight elevator time for getting the trades and supplies to the various jobsites on time when bid the job. Trades workers waiting around for the elevator to take them where they needed to be when they needed to be there, and then getting there and have to wait for equipment or supplies that were waiting for the freight elevator, all the while the meter for the paychecks were running. Life isn't always fair, and if we learn from the times that it isn't, we're better off next time, if there is a next time.

Look at it this way Stan, I'll bet the guy offers your name up when he hears of others needing miscellaneous help. And when you get a call, due to the economy, taxes, and having to pay healthcare expenses for your employees, the prices had to increase out of necessity. Reasonable customers can understand that, or not, and if not, you don't lose your shirt again when they don't hire you. For every negative, there is a positive. Its just how you view it.

Mark
 
I have not lost on many bid jobs, but have worked real cheap. I charge the difference to my "educational account" Supposed to teach me to bid better next time.
 
I have not lost on many bid jobs, but have worked real cheap. I charge the difference to my "educational account" Supposed to teach me to bid better next time.
 
Guess I got lucky. Guy wanted me to bid on doing some backhoe work. 1/2 mile from my farm. I told him that I had no idea how to bid it but I'd do it for $55 and hour plus fuel. He thought it would be about 3 hours but I ran into a bunch of big rocks......11 hours later I was pretty happy!

Rick
 
If you get all the jobs you bid on,you will end up broke. I learned that by the time I was 21. I get outbid most of the time but never back up on the ones I get.
 
Some jobs are best to do by the hour. I know when I had some post holes to drill with the skid steer, the rental place(for the auger) said to charge by the hour because you never what the ground will be like. I think the same would apply to job like this.
 
That's what Errors and Omissions insurance is for. Just throw out a number you're happy with, and if they want any additional work done outside of the contract, charge it as an extra, that's where you make your profit.
 
i feel your pain ive under bid on a few myself, not much you can really do unless there is additional work to bid on the same project, where you can recover some of it, its a tough game , win some lose some, but it sure hurts when the "lose some" comes out of your pocket, ive been there a few times myself
 
Bid high and bid often. You may not get as much work, but it's better than being low on every job. Sometimes when you look at the bid tabulations, you wonder if everyone has the same set of plans. One job recenly had a spread of $500,000.00 just on the interior work.

Larry
 
That is why the "lowest responsive bidder" is not always the best one to award to, look at the reason for the gap, often times its a mathematical error, or an oversight on the scope of work, when I see a differential like that, immediately a red flag comes to mind for problems down the road.

Sometimes things get too competitive, reducing profit margins to the point where your equipment, manpower etc. is better off being idle. It's not worth the overhead or the wear/tear to break even.

One thing about the lump sum contract is you absolutely must make sure there are no gross mathematical errors or big ticket items overlooked. Another is after award, when encountering problems, (realizing there are only so many hours in the job) having a decision making ability to stop the clock, re-evaluate and make necessary changes to make sure the outcome is successful, (profitable). Nothing is perfect, bad jobs come up, its the other good ones that carry you, you just don't want several in a row or consecutively.
 
I know two contractors who worked it like this: They would bid a job and see how the bid was received. One would say in a half whisper, " don't tell any one about this price" Then once he got the bid he would call or come by every other day or so and tell that he had forgotten to put in for this and then for that. Once he got to the breaking point he would take a little off for some aspect, then go ahead with the job. Everyone was happy!
 
Bout fifteen years ago i worked for a large electrical contractor in PA. We lost almost 300,000 on a new high school job because the estimator bid at the wrong labor rate!
 
I've got a backhoe and a small dozer here on the farm.Every once in a while someone will tell me about some redulcious bid they were quoted for a small job.Some i can do for half the quote they got and still make good money.A woman who owns a farm near me was quoted 1000 bucks to fix a field tile.I told her i would do it for 500 and furnish the tile.I wouldn't think you could get anyone to show up for only 350 bucks.
 
A friend of mine was in the tree removal business and was getting nearly every job he bid on. One day he asked a customer if he was a lot lower than the others. The reply was "No, actually you weren't even the lowest, but we trusted you."
 
The Davis Bacon rates will kill you if you screw up on them.

All the "shovel ready" jobs the taxpayers paid for with the Porkulus Bill are mandated to be at Davis Bacon rates to give the unions work - I guess the taxpayers and the Chinese don't need that money.
 
Here's the way you need to look at it.
You bid $350.00 and you won, you made $350.00 and got some firewood. The other two bids were $2000.00 they lost and got nothing and no firewood. Who is really ahead there? You or the guys who lost the bid. You did not under bid they over bid.
 
Right, but one flat tire or job related problem with your equipment and you are in the drink, you can't be in business to gamble, the odds do not work, this time you win, the next 3 times you don't. You need that buffer whenever possible, but without being greedy. I agree with the risk taken no guts no glory, but use that as a business model, over time it fails, there is always that element of unforeseen things arising, you can take a chance on ocassion, but if jobs are that competitive, very difficult to succeed by making reasonable profits, depreciation, wear/tear on your equipment, general conditions overhead never stops, and is why your profit margin cannot be consistently low.
 
Yeah, he probably bid the labor at the amount they normally paid their workers, not at the ridiculous "prevailing wage" rate required for guvment contracts. $36 per hour for laborers? You've got to be kidding.

But take heart- the outrageous wages are only for those whose craft has a union. Laborers digging up shrubs get $36 an hour, but if you do it with "landscape workers", prevailing wage is only $14.

And now we'll hear from Trucker 40 on why the unions aren't ruining the country.
 
I dont know why you would say that.Unions arent perfect.There are crooks in everything nowdays.Where I get mad is when people say we have to get rid of all of the unions.Youd better look and see just what that means.There are a lot of people who work for a union that dont get 30 dollars an hour.Just as soon as all of the unions are gone your pay will go way down.Everybodys will.We cant compete with China or some other slave driving country on wages,and we never did anyway.However if you are dumb enough to fall for it,they will drag this country right down to Chinas level and you will have a whole lot more people mad at you than an old trucker.You wont like working for pennies an hour and sleeping on the floor at the factory if you are lucky enough to have a job either.
I wish for a change you would think instead of attack somebody.It doesnt make any sense to try and compete with China to start with.Thats where being anti union leads.Im not going there without a fight and neither should you.That doesnt mean that 30 dollars an hour for laborers is fair either.Crooks like that need to have something done about it.
Now from what I know about it,there are lots of construction companies who cut everywhere they can,maybe dont even know what they are doing,and bid jobs way too cheap.That stuff will keep those guys out of those jobs because it will break them.Look at the bright side,if it breaks a few of those crooks and gets them out of your way,it might actually help you instead of give you something to cry about.Just like everything else nowdays,Everthing is against you unless you have some big business and then they help you out.Small and Medium size guys are finished.Of course your union busting buddies are doing that too,but you dont notice that now do you?
 
Mike (WA), Your figures and facts are a bit "glorified". I own a construction company in Central Missouri. We bid and (sometimes) are low bidder on government contracts. We must pay prevailing wages on those contracts. Those wages vary depending upon the county of your state. I recently completed such a job. I paid my laborers $31.93 per hour. THis job took 3 months to complete. Each worker received approximately $9400.00 in gross wages for the total 3 months. Only one week, were we able to work a full 40 hour week (due to weather). So, on a yearly basis if we could stay employed, each of my guys would make approximately $37,000.00 per year. And you think that is a ridiculous amount?? We also are NOT union. ANYONE who bids on a job that is funded in any way with Federal money must comply with prevailing wage.....like it or not. It's tough bidding on any jobs these days. More than once I've been glad I wasn't "low bidder". And, for what it's worth, my workers made a ehll of a lot more "clear" money with this job than I did. Yes, they did the work. But I took all the risk and had to provide the operating money. All risky and no makey just don't cut it. Owners and management are too often raked over the coals for the profits they make. If I announced to all my workers that each of them would share equally in all the profits, they'd applaud. If I announce that each of them will share in all losses, they would all quit.
 
(quoted from post at 09:46:17 07/26/11) I dont know why you would say that.Unions arent perfect.There are crooks in everything nowdays.Where I get mad is when people say we have to get rid of all of the unions.Youd better look and see just what that means.There are a lot of people who work for a union that dont get 30 dollars an hour.Just as soon as all of the unions are gone your pay will go way down.Everybodys will.We cant compete with China or some other slave driving country on wages,and we never did anyway.However if you are dumb enough to fall for it,they will drag this country right down to Chinas level and you will have a whole lot more people mad at you than an old trucker.You wont like working for pennies an hour and sleeping on the floor at the factory if you are lucky enough to have a job either.
I wish for a change you would think instead of attack somebody.It doesnt make any sense to try and compete with China to start with.Thats where being anti union leads.Im not going there without a fight and neither should you.That doesnt mean that 30 dollars an hour for laborers is fair either.Crooks like that need to have something done about it.
Now from what I know about it,there are lots of construction companies who cut everywhere they can,maybe dont even know what they are doing,and bid jobs way too cheap.That stuff will keep those guys out of those jobs because it will break them.Look at the bright side,if it breaks a few of those crooks and gets them out of your way,it might actually help you instead of give you something to cry about.Just like everything else nowdays,Everthing is against you unless you have some big business and then they help you out.Small and Medium size guys are finished.Of course your union busting buddies are doing that too,but you dont notice that now do you?
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Actually very few people are union workers about, 9% of the work force. And the unions have caused a lot of companies to go under because they just can't pay SOME of the wages and compete in the market. On the other hand many years ago unions did a great deal of good. 2 sides to every story.
I have relatives who lost jobs because or worker greed and the union urging them to strike for even more money, at the time they were making about 25 an hour in 1978. Place they worked at closed up.

Rick
 
Use to do a lot of custom ornimental iron work (manufacture & install) It was all done on bid. Was a speaker at a College business class Question/ How do you determine your price,"all the market will bear" Was directed to a big job by a friend. He told me the fellow would agree and when it was complete and you went to settlethe old boy would argue for a better price. So added a extra $1000 to the bid. Sure enough he start to argue. My answer was Sure."give me cash and I will tke off a $1000" Old boy opened his billfold and counted out $100s. He was happy and so was I. Did a lot of work for him and it as always the same, gitrib
 
Some times low ball bids work out pretty good, like you and your fire wood. Most folks would have to pay to dump it some where.

'Bout 10 years ago a buddy of mine was want'n a track hoe real bad, just hated to spend the money for one. Had one he was look'n at, nice used job on the local Cat lot for I think at the time was right at $60,000 or so. A city just north of here was take'n bids on clear'n out a log jam at the mouth of a creek right at the mouth where it dumps in the river. He bid $60,000 think'n the job could pay for the hoe. Went to the bid open'n and every one else had bid at least $125,000, he was sick think'n he had really messed up. Went and bought his hoe, hauled it to the creek where the log jam was, unloaded it and poked around on the jam for about an hour try'n to learn how to use it. Right at dark it was start'n to cloud up so he pulled the hoe to the top of a hill and went home. Next morn'n we had got about 3" of rain and he had knocked the pile of logs around enough to get them loose, they were no where to be seen. $60,000 for an hour of work and 40 miles haul'n wasn't the bad deal he though it was going to be.

Dave
 
Right, but one flat tire or job related problem with your equipment and you are in the drink, you can't be in business to gamble, the odds do not work, this time you win, the next 3 times you don't.

=================================================

That's great in theory but you are bidding against others that don't so you can't either if you want to stay in business.
 
Don't forget unemployment compensation when they are rained out. In Washington, maximum unemployment comp is right at $14 per hour, so that would add another $13,000 or so. That gets them to 50 grand per, not bad for no education or tools needed, and only working a little over half time.
 
He didn't MAKE $350.oo payed his helper $100.oo so that leaves $250.oo I'l bet you he had at lease other $100.oo in the job, so he has some wheres round $150.oo left to take home.
 
The point is there is no profit if you are not working. The guys that over bid had no chance of profit. I've been self employed for 23 years, some days I'll work just to break even (pay the bills) other days I'll clear $500.00 or $600.00 so in the end it all averages out. If you want steady income the unemployment and welfair will give you that, easy hours, no risk, no future.
 
I do understand the low ball award and acceptance of same to just keep your doors open, your people working, but eventually it will bite you in the @ss ! LOL Now for a larger operator, they might be able to take the peak highs and lows, but not the small guy.

I had been driving for a long time farmer friend, part time 2nd job and one of the things I was hauling was sawdust & grindings from local sawmills, for calf bedding at a 2000 head farm which is a valued customer of his. Sawmill charged $300 at one place, load was heaped, and about 40 cu yards, another place I think charged a little more, this sawdust is high in demand and low in supply, hard to get. The load paid crap, $450-$475, dairy would absolutely not pay any more. Tandem axle DM Mack, sileage/grain body, photo below.

Insurance, fuel, driver pay, repairs and maintenance, are costly items, when said and done, it has been awhile, I tracked fuel, mileage, driver pay (I worked cheap as a favor and knowing how little the job paid) Fortunately, I did not blow any tires, he did fairly often before health issues kept him out of the seat, trans dropped a bolt inside the case, myriad of other things, do you continue like this, not worth it at all, one lousy big ticket item, say D.O.T. inspection, truck was well maintained too, you lost your @ss. He gave up that run, hay & straw to the same customer pays a lot better, more of a cushion when things go wrong and they do often. I disagree, you keep going to keep your truck rolling, driver has a job, and your business open, yet every time you do one of these low profit loads, something goes wrong, you lost quite a bit. Now this is a small operator, but that is what we are talking here, larger operators diversify more, run more, and can justify late model equipment based on higher sales volume, the small guy can't, I disagree for the small operator, you have to be really careful of the work you take. Fun for discussion though, everyone deals with this problem, hard to quit too ! LOL

Hay7307037.jpg
 
He broke even on the machine for the most part, minus, maintenance, depreciation, insurance, bonding, operator, trucking, fuel, what have you and thankfully no mishaps on the job. That is a quick learning curve, but now you own the machine which sets you up for other work at least, with a better chance at profit, hit another one like that bid, things are looking up, though at first glance it looked like you would take a bath.
 
I agree, the good jobs carry the bad, and you have to keep the doors open at your own cost but the small guy absolutely has to pay attention to and carefully manage every aspect of business, especially pricing. This is where so many business's fail, that roller coaster ride of good/bad jobs is too much. I've seen it in the multi million dollar world just the same, numbers are bigger, those losses hurt big time, and do claim lots of victims. I've been self employed for many years of the course of time and know and have seen many small business's go for the ride. I guess you know when its time to get into something else or work for the man when too many of those jobs go sour. I've been in the same situation, even on the same job, whereas, portions of the job made fantastic money, and some line items were tight, even a slight loss. I've done jobs that ate up too much labor, to stay open, and maintain a reputation for good work, don't like it though. Just me, I have a penchant desire to avoid those losses, irks the heck out of me, you bust your chops, do all the extras required of a small business owner, and you don't make a profit, sometimes it does not make sense LOL !
 
Yep, at first he thought he had really messed up, but he ended up in the hoe buisness with a paid for hoe for an hour of work and 40 miles truck'n. He already had a dozer so he had a low boy set up to haul it, worked out pretty good for him.

Dave
 
What always ticked me off was the management running out on the jobsite and trying to chastize the workers for "losing money", when it was really their ineptitude at bidding that was causing the problem. It don't matter how fast you work if you bid too low, you still ain't gonna make a profit. You can slow the bleeding, but you can't stop it.
 
(quoted from post at 20:15:44 07/26/11) What always ticked me off was the management running out on the jobsite and trying to chastize the workers for "losing money", when it was really their ineptitude at bidding that was causing the problem. It don't matter how fast you work if you bid too low, you still ain't gonna make a profit. You can slow the bleeding, but you can't stop it.
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I was working in a small tool & die shop, back in the 70's. We had a supervisor / estimator who got hired because he was a BIL to the owner. He quoted a large die job. Problem was, we didn't have the machinery large enough to do the job. We had 1, small, old boring mill. To machine the die shoe, the shoe had to be moved on the table, and outboard supports rigged up, since it was much larger than the table. The first millhand worked on it for 40 hours, and only got partly done. He got fired. The next guy worked on it for 2 days. He got fired. The next guy worked 1/2 a day, until lunch. He got fired. I took a long lunch, got a job at another shop down the street. I returned, and the boss wanted to give me the mill job. I told him that I was leaving for another job. Btw, the new job paid more, and was a lot better place to work.
 
Billy,

Most of the succussfully people I've met in my career have been wealthy, broke and wealthy again many times over. I read in another post that the poster would not gamble their money away, well news flash everyday in business is a gamble. Like you said break downs, flat tires and customer going bankrupt slow paying customer, sickness, injury the list goes on and on. Some people have a stomach for it some don't. When I started out in business I look around me and saw friends and family worrying every month or year about the plant closing or the company being bought out, and if they would have a job. I thought why should I let some one do that to me when I can do that to myself and then jumped in with both feet. I have never looked back.
 
(quoted from post at 09:46:17 07/26/11) I dont know why you would say that.Unions arent perfect.There are crooks in everything nowdays.Where I get mad is when people say we have to get rid of all of the unions.Youd better look and see just what that means.There are a lot of people who work for a union that dont get 30 dollars an hour.Just as soon as all of the unions are gone your pay will go way down.Everybodys will.
Click to expand...

And HOW do you know this??????

We cant compete with China or some other slave driving country on wages,and we never did anyway.
Click to expand...

So WHAT is your point?????

However if you are dumb enough to fall for it,they will drag this country right down to Chinas level and you will have a whole lot more people mad at you than an old trucker.You wont like working for pennies an hour and sleeping on the floor at the factory if you are lucky enough to have a job either.
Click to expand...

"Doom and gloom",... typical mindless abundant gibberish!

I wish for a change you would think instead of attack somebody.It doesnt make any sense to try and compete with China to start with.Thats where being anti union leads.Im not going there without a fight and neither should you.That doesnt mean that 30 dollars an hour for laborers is fair either.Crooks like that need to have something done about it.
Now from what I know about it,there are lots of construction companies who cut everywhere they can,maybe dont even know what they are doing,and bid jobs way too cheap.That stuff will keep those guys out of those jobs because it will break them.Look at the bright side,if it breaks a few of those crooks and gets them out of your way,it might actually help you instead of give you something to cry about.Just like everything else nowdays,Everthing is against you unless you have some big business and then they help you out.Small and Medium size guys are finished.Of course your union busting buddies are doing that too,but you dont notice that now do you?
Click to expand...

More gibberish,... do you EVER post ANYTHING that makes even a little sense???
 
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