Quoting apples to oranges

[Tom Jenkins]

I just cringe when someone says: "Here's a quote from your competitor..."

I used to have a plaque on my office wall: "I never argue with those who sell for less. I figure they know what their work is worth."

If I was in an especially ****y mood I'd Xerox it and Fax it to a lost customer. (This was a long time ago, before I learned to let go ......)

 

[JeffKiper]

Tom I think you were the one that originally said you where in a meeting and they showed you your competitions quote. You then no quoted it. About a year or so ago I was in that same spot they said can you do better than this. I responded not now. I don't want to win the job based off of home cooking. I ended the meeting and left. Before I got to the truck the engineering manager called and said I had the job. I had not given them the quote yet. I was lower only because I had a good understanding of what it was what they needed not what they wanted.

Last night my wife said you are handling this so much better then you would have 2 years ago. I replied I am not going to pay them to work there. It is not always so important to have every hour booked. Sometimes there are jobs that don't make make money they just take time.
TWcontrols had definitely help mentor me into understanding this.

 

[Ron Beaufort]

It is not always so important to have every hour booked. Sometimes there are jobs that don't make make money they just take time.
TWcontrols had definitely help mentor me into understanding this.

it is a pleasure watching you guys grow ...

 

[JeffKiper]

It is a pleasure learning from all of you guys.

 

[Joe@ICA]

None of this brain-bashing really matters, now, does it?But, whether the low-baller crashes and burns, or not, at the end of the day, you didn't get the work.
Sometimes, like Tom said, you need to move on.

I have picked up a fair bit of work from clients after I lost the bid, but my competitor crashed and burned.

 

[Lancie1]

Jeff, You and Tom are correct I am moving on and letting it go. I just wondered how you guys handle these things.

There is a method that can be used by contractors who get tired of seeing the competition bid a lower-quality job than the one specified. You have to write a tight legal specification that has a page describing all the things NOT included in the job. This list is inserted in your written bid just after the pages describing ONLY exactly what the client requested in his bid documents and drawings, but not a bit more than that.

These "not included" items will be all the things left out by the low-ball competition (but not specifically mentioned). The "Not Included" list has prices and rates for the additional work. In many cases the low-ballers are so inexperienced and unknowledgable that they did not know that these items were even needed or expected.

The advantage of making this list is that you bring the unknown items to the attention of the client, and you can still be the low bidder, but it is clear that all the extras not included by you (and your competition) can be added by signing Change Orders AFTER the original contract is signed.

What happens in most cases is that the client looks at your list of "Not Included" items, then starts to wonder how many were included by the low-baller in his cutthroat bid. To his horror he may find that NONE of them were included, and maybe some were not even anticipated. This can help identify an incapable or inexperienced contractor very quickly. Then negotiations for the TRUE low bid are re-opened and you are back in the running.

Some bid items that are commonly left out of electrical bids (but usually need to be covered) are drawing update costs, drawing search costs (where the client has the information but doesn't know where it is), temporary electrical power (for new installations), setup cost for contractor on-site office, fees for on-site temporary equipment storage and security, fees for electrical permits and inspections, sales taxes, software fees and licenses, and on the plus side, local or state deductions for possible rebates or discounts for investments in new facilities, "green" discounts, or for producing new jobs. There can be many others depending on the type of job. For some jobs where new methods or new technology is required, a technology development fee should be added to cover this real cost.

 

[Joe@ICA]

There is a method that can be used by contractors who get tired of seeing the competition bid a lower-quality job than the one specified. You have to write a tight legal specification that has a page describing all the things NOT included in the job.

I agree, my quotes have evolved in this direction as well, in part because I quoted on a job, and my customer contacted me and asked why I was so much more expensive, even though my rates are much lower than my competition. So I broke the quote into "stuff my competitor is providing", and "extra stuff that I'm providing" as optional.

This helped make it clear that my competitor had left out some substantial (and NOT optional) items.

We got the job, and have since taken all the business from that customer away from our competitor (who was the primary integrator prior to this project)

 

[The Plc Kid]

I do a little bit of contract work on the side both in automation and IT and more in IT than anything. I read this article a while back and it is very good and it is based on a IT service buisness but can be aplied to almost any buisness.

A good read if you have the time. http://www.experts-exchange.com/ITP...o-Fire-Your-Customers-to-Make-More-Money.html

 

[The Plc Kid]

Another good one http://www.experts-exchange.com/ITP...you-should-NEVER-fix-a-computer-for-free.html

 

[RheinhardtP]

This morning I was told that I did not get to bid so I plan on watching from a far distance.

I was handed his quote. I designed a safety system that will comply with ANSI. My competition system will NOT comply. No big deal for me I almost brought that up that we where not quoting the same functionality. I will let them make the call. Last time I voiced the my concerns my competition was handed the solutions and the job. I will let them build the systems after the customer signs off in them I will try to get the changes.

Jeff, the fact that he showed you the guys quotation is unethical and should tell you how he operates. I would not do business with someone like this. I have been offered in the past to see a competitors proposal so i can "adjust" mine to get the job. I basically "adjusted" my attitude and refused to do business with them again.

Alot of the time i find the low proposals lack the detail that is required and also generate the rest of the work on variation orders. So they will make it look like they offering the complete package but word their proposals in such a way that it is open for interpretation. Some companies do business like this and it is part of their business strategy.

I would stick to a well documented proposal that clearly defines the scope and as Lancie said consist of a even more detailed exceptions list that is associated with the job. There is however a fine line of doing a proposal detailed enough so your client understands what you are delivering but that he just cant hand over your proposal to a friend and say quote me on this.

On the fact of just being a comparison quotation for the financial departments i have a three strike rule. I will do 3 proposals for a client and if the work does not come our way i will cut those losses and move on, you tend to pick up this trend very quickly.