MAKE YOUR NEXT CONSTRUCTION PROJECT ATTRACTIVE TO THE CONTRACTOR
The more attractive (or desirable) a project can be made to the contractors/bidders the lower the cost will be to you. What makes a project more desirable?
1) Timing of the bid: for roofing and other weather dependent trades (exterior painting, paving, striping, earthwork, etc.) putting a project out for bid in the winter months when the contractors are not able to work creates a very aggressive bidding environment that can result in significantly reduced bid prices.
2) Timing of the work: Some construction projects (especially subcontract work on a general construction project) have very tight timelines without flexibility. Every contractor will have a certain number of projects with a set-in-stone schedule; the more desirous projects are those projects with adaptable schedules that can be used to fill in around the projects with set schedules. This may seem like a small issue; however, to the contractor it is a major issue that can translate into lower bid prices. Especially for weather dependent trades, contractors will bid aggressively for projects that fall under the following three time categories: (a) projects with a flexible early spring start so the contractor can get an early start on their summer’s profitable work season, (b) small to medium size projects that have a flexible schedule and can be used to fill in around the larger fixed schedule projects and (c) late season work that can extend a contractor’s season of work farther into the fall (This last item will vary greatly depending on total volume of work for a given year.
3) Bundling projects: bundling is somewhat of a misnomer, as the projects can be put out for bid in a bundle, but each project would have its own unique bid documents, its own contract and could even be for different principals. Effectively bundling projects requires a reasonable assurance that each project will be awarded at about the same time period. Bundling creates aggressive bidding where each bidder is offering significant concessions to win the group of bundled projects. To achieve the best results, bundling should be created by a design professional with appropriate bid documents so that each bidder submits a comprehensive apples-for-apples proposal for each project. Each project is bid separately and the bidders are encouraged to offer concessions for the award of multiple projects.
4) Professionally designed bid documents are a critical element in any construction project. Having a professional designer create the bid documents will often save you money in the long run by creating a competitive bidding environment, reducing the likelihood of change orders, ensuring that the project meets building code requirements and much more. I have found that the amount saved by making a project more attractive to the contractors and creating a very aggressive competitive bidding environment often saves the principal more than the amount of a roofing consultant’s fee.
5) Eagerly encourage confidential value engineering ideas from the contractors. In a design/build situation, value engineering comes from the collaboration between the designer and the contractor. In a competitive bidding situation it can be more difficult to encourage value engineering ideas, but it must be done. The designer should be eager to tap into the experience and knowledge of the contractor. When I am conducting a pre-bid job walk-thru for a roof replacement project, I am present on the roof with over a century of cumulative roofing experience – in my experience it would be foolish not to tap into this knowledge base. The counterintuitive part of value engineering is keeping the contractor’s ideas confidential from the other bidders. It has been my experience that if the idea is shared with the other bidders and all bidders are allowed to submit their bids using the one contractor’s value engineering idea then when the next project comes out for bid the contractors won’t offer VE ideas because it would not give them a competitive advantage.
NOTE: The information contained herein is the opinion of the author. The opinions expressed do not constitute legal advice.