What’s In a Bid?

Before I moved to the Spokane area, there was a local practice for bidding jobs.  When the project plans had been created they would be sent to the supply houses so that they could do a “take off” of material needed for the project.  Any contractor wanting to make a bid on the project would get the cost list of the material from a supply house and work up their bid for the job.

Depending on how often and how much each contractor purchased from the supply house, their price could differ from one contractor to another.  As a consequence the number of electrical contractors bidding on the larger jobs decreased.  Larger purchasers received a greater deduction on their price list and the smaller purchasers could not be competitive.

Even on small jobs, I would sometimes give a bid to a General Contractor and he would “shop it around” to other electrical contractors.  Then he would come back to me and say, “The job is yours if you will do it for this amount of money.”

Of course this would guarantee that you would get the job, but it would also guarantee that you would lose money.

I have found that your best bet is to have loyal customers that know and like your work, your prices, and your trustworthiness.  You can imagine the difficulty a new business would have getting established in an area.

A government contract is more regulated, so it would be good to get a government contract to help get a business established.

Sometimes a company would lose money steadily until they got a government contract. They would make money and get back on their feet.  Then they would lose money again until they got another government contract.

One of my friends had worked at a supply house and gave one of the electrical contractors a real good material price on a project.  The contractor didn’t come back to get the material for the job and my friend wondered what had happened.

Later, he saw the contractor and asked him about the job.

The contractor responded; “Your price was the best, Bill, but I threw in enough money to get a new pick-up and didn’t get the job.”

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