# Low ball bidding



## MTN REMODEL LLC (Sep 3, 2010)

griz said:


> So now if the other bidders would abide by this simple concept....
> 
> Maybe a clause like this should be in the Bidders Instructions packet...


But Griz..... It is in The FREE ENTERPRIZE AND CAPITALISM INSTRUCTIONS/CONTRACT.

Best

Peter


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## FrankSmith (Feb 21, 2013)

Driftweed said:


> Yes, in an even playing field where all contractors are legit you can do that. That's commercial/government work.
> 
> But in the residential world it completely the opposite.
> 
> I paint apartments at a cuthroat price, however when i step into the residential world I can charge 5 times as much and still be cheap. It's wacky but true.


How are things going for you? Have you gotten in with some more landlords? I know you wanted to get some crews going from a thread about this time last year.


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## Driftweed (Nov 7, 2012)

Frank, not only do I do single occupancy housing, this month I began going after multi-units (complexes). So far this has been my highest paying month ever. As soon as I see a check from my first unit, I have 2 employees lined up and ready. I just don't want to hire without cash reserves. I have decided to do what I do best, be the salesman/delivery guy.


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## brunothedog (Sep 8, 2013)

mudpad said:


> So in this scenario, does each trade turn in a separate "discount rate" or does the GC just discount the entire project base on what he gets from his subcontractors?


the GC gives a discount rate on the whole job.

Their were 22 different general contractors bidding on the last state job
I WON (22.68% discount) that consisted of redoing a piazza of 140sq. meters in cut stone blocks. there were sewers to redo and move.
as along with water and telephone cables, 45000.00 job discounted to 36 n something k.
All said and done after 5 weeks of work, all paid i was left with 13 thousand euros in my pocket.
down the street at another work with 40 sq. meters less, 
They kept 3 people 10 weeks to do basically the same job. they lost money, was told by the Engineer that they went under 4 k.



I've said 60%, but its close to 90%. organization is everything.
and usually the subs i have come I pay in cash, job finished. doin so they give me a pretty good discount on their own


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## brunothedog (Sep 8, 2013)

I started this tread to show that quality can be done at a great price.

many Co.s here accuse me of low ballin'

I am making good money, at an honest days work,

Times are hard here and many are falling.

I can't help it, nor do i care if the other can't keep up.

I would love, it's my dream, to work at Their prices, I would take in 20000.00 a month with the production we do.
those times are over


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## Oconomowoc (Oct 13, 2011)

Sure a person can do excellent work at low prices. Absolutely without a doubt, happens every day. 

It's just that he retires broke.


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## Driftweed (Nov 7, 2012)

Crazy. $2k/month is good to you? The cost of living must be low over there. Mine are low for 'merica and 2500 barely covers all the personal bills + food.


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## blacktop (Oct 28, 2012)

You get what you pay for!

Do your homework ! You can find the best ! You can find the hack!


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## brunothedog (Sep 8, 2013)

Driftweed said:


> Crazy. $2k/month is good to you? The cost of living must be low over there. Mine are low for 'merica and 2500 barely covers all the personal bills + food.


you forgot a zero


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## svronthmve (Aug 3, 2008)

brunothedog said:


> I started this tread to show that quality can be done at a great price.
> 
> many Co.s here accuse me of low ballin'
> 
> ...


So you're competing and beating others bids by paying guys regularly in cash under the table.....

Admirable.....:no: 

I knew there was a scruffy lining to this poor idea.


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## Morbidzero (Aug 5, 2013)

Jaws said:


> I don't think larger firms are better. But they usually have more resources, capacity to put more hands on the job, ect..., which should translate to speed.
> 
> If the larger firm is doing 2-3 jobs at once, the amount they HAVE to mark up each job drops. During the recession lots of builders did it here.


Just because a company is bigger and doing more work doesn't mean they have any less expenses so they shouldn't be lowering their markup. Not saying they don't but rather they shouldn't as its a recipe for disaster.


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## Jaws (Dec 20, 2010)

Morbidzero said:


> Just because a company is bigger and doing more work doesn't mean they have any less expenses so they shouldn't be lowering their markup. Not saying they don't but rather they shouldn't as its a recipe for disaster.


Many things most contractors do are a recipe for disaster. Some are better at managing a train wreck than others. Look at the OP, I cant imagine doing what he is talking about, working my azz off for paupers wages.


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## brunothedog (Sep 8, 2013)

Jaws said:


> Many things most contractors do are a recipe for disaster. Some are better at managing a train wreck than others. Look at the OP, I cant imagine doing what he is talking about, working my azz off for paupers wages.


pauper wages? i must be really bad at putting in words what in my mind is thinking.

So, 6 months ago I get a good small job 3 weeks long, After material, labor, expenses, I am left with 1750.00 euros.
In the labor cost is my 250 euros a day.

IF a job comes along after that I will low ball the competition, I will do a week of work for 500 if i see fit.

I know that I am a moron,

But, competition doesn't deserve a break. Gotta keep em on their feet


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## greg24k (May 19, 2007)

I don't think Lowballing is the proper term here. There is a big difference between "Lowballing a price" and "giving a low price"

Lowballing is interpreted in any business as something unrealistic.i.e if someone is selling a car for 12 grand and you try to lowball it by offering 5 grand for it, it will piss the seller off and they will not deal with you. 
Or if 3 contractors bid the same basement job and the bid comes in @ 10k, 9k,8k and someone offers to do it for 5k and the owner jumps on that he gets lowballed and he will get ripped off because it's not a realistic number... Where 8k being the lower bid which is legit and the work can be performed no worst then a 10k bid.

So in most cases, especially big state jobs, government jobs, even when GC takes bids there is no Lowballing bids, because people who review bids and who choose the right people for the job already know what it should cost, which numbers make sense and which don't.

Many new guys in business make the same mistake, they don't know or don't take the time to properly estimate the job... To set the price right, to make money on the job and at the same time not try to retire from one job....and when they lose the bid, they think they got lowballed by someone who's quality of work is poor and they don,t know what they doing... Which is not the case.


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## Oconomowoc (Oct 13, 2011)

brunothedog said:


> I know that I am a moron,


You're not a moron.


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## greg24k (May 19, 2007)

brunothedog said:


> pauper wages? i must be really bad at putting in words what in my mind is thinking.
> 
> So, 6 months ago I get a good small job 3 weeks long, After material, labor, expenses, I am left with 1750.00 euros.
> In the labor cost is my 250 euros a day.
> ...


IMO you have wrong mentality on the issue and you working harder for less money... and not only you losing money, you hurting your business in the long run. 
Let's say what if the competition comes in lower then that... will you lowball them to make 250 a week instead of 500 if you see it fit?

If you know you're a moron for doing what you doing (per your words)... that means you know you doing something wrong and you not lawballing your competition, but you lowballing yourself.

What you doing is chasing someone else's dollar, not knowing how or why they doing work at that price... Maybe because of theirs prices, they be out of business before the year end, and you trying to beat them up, you be not far behind them. 

I learned a long time ago that when you try to sell on the price, the majority of clients you are attract are stupid people... because customers who focus on the price, they don't know or understand the value they're getting, and if they don't understand that, they will never appreciate how they can benefit from what they're getting.

I walk away from people who waste my time by trying to explain to me what the competition does and what they offer them... this is the best part I enjoy is when I tell them "Why're you wasting my time if your only concern is low price... Please don't call me again?"

Long time ago I came to a conclusion that not all customers is worth having, and since then, I been choosing customers for whom I will and won't work, and by doing that my business grew and became more profitable than ever before... Not to mention, that the time I was wasting on BS dealing with such people, I put my time to a more useful use, like go the gym, etc.

I am thankful for customers who don't know or understand the value of what you offer them or who don't appreciate the expertise and knowledge... so instead of chasing someones low bids and try to lowball theirs numbers, I give them all this customers I walk away from as a gift... 
Let them waste theirs time dealing with them... Because I been doing this too long and worked very hard to get to where I am today, and that is being a Professional and reputable contractor and running a very profitable business.


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## Kniggit (Apr 11, 2013)

An immigrant cut throating the prices of the natives, where have I seen this scenario before???


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## brunothedog (Sep 8, 2013)

greg24k said:


> I don't think Lowballing is the proper term here. There is a big difference between "Lowballing a price" and "giving a low price"


I'm fully aware of this.

if i have a good year, and have the chance, i will and do lowball.
I see it as the next one in line hitting the construction lottery.
mind you, never jobs over 15-20k.

I make a great living working here.
by my self i average 60-80 k a year after everythings paid for-

i really don't think i am not making enough.

a few of the undercosts jobs got me over 100k jobs.

little fish, big fish.

when i want in the door of a future potential client. i will be the one that asks 5 k for that work you used as an example.

and it will be done like the others, if not better


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## greg24k (May 19, 2007)

brunothedog said:


> I'm fully aware of this.
> 
> if i have a good year, and have the chance, i will and do lowball.
> I see it as the next one in line hitting the construction lottery.
> ...


So you get into the door on one job and there is another 4 jobs back to back from the same customer and if you follow the above example, you take a 3k hit on one job just to get in... now you doing the rest of work for the same amount, because you cannot change your numbers, and basically you starting to swim up s^*t creek.

You just made a perfect example why this cannot work and proved the point this Post is all about... and that is _ That when you lowball the price to get a foot into The door , the door becomes a revolving door_, and as you get your foot in the first door, the other portion of the door hits you in the A$$ and you lose money. 

This is why people walk away from jobs without finishing them, and like I said before, they don't know how to properly estimate the job,they chase others money and deal with consequences which are: going out of business, not making any money, leave the jobs unfinished, not to mention cut corners and hack s^*t up.


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## brunothedog (Sep 8, 2013)

there are no 2 jobs the same here.

another you's seem to overlook, once ya get the job, money is only talked about at the end of the job.

what I am saying is the word passes around that ya do good work at an affordable price.

Architects, clients, etc.. usually don't talk about what ya asked for.
and since no 2 jobs are the same, 

Every job is a custom one of.

only 3 times in the last 20 yrs. working did the highest bidder win.

The private home owners thought that the highest price was a guarantee to the best quality available. man where they wrong.

more on that paragraph in a few days


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## svronthmve (Aug 3, 2008)

brunothedog said:


> more on that paragraph in a few days


Oh please, bestow some more corrupted and bankrupt wisdom upon us all! :no: :no: 

You're exactly the type of contractor that hurts the industry for those who are trying to make a legitimate wage to feed their families! 

You'd do well to stop blathering and putting out spam quality thoughts, and instead, spend that time reading here on CT and learning something helpful.


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## blacktop (Oct 28, 2012)

I know lot's of masons....80 K a year sounds really low to me !

I know one mason that works solo, And he brings in at least 350 k a year.

80 K sounds like a # a Drywaller would brag about. :whistling


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## greg24k (May 19, 2007)

_another you's seem to overlook, once ya get the job, money is only talked about at the end of the job._

In the hack world things work that way, you do the job and talk money later. 

_Architects, clients, etc.. usually don't talk about what ya asked for._

I don't know WTF this means.

_Every job is a custom one_

Custom jobs there is no such things to get a foot in the door. When custom jobs involved, Clients concerns are about the outcome of the job, not the cost of it and 95% of the time they will use a reputable contractor and they will not base theirs decision based on the price.

_The private home owners thought that the highest price was a guarantee to the best quality available. man where they wrong._

Like anything else, there is no guarantees. High, Low it don't matter, anybody can get screwed under various circumstances... with that said, most get screwed for lack of common sense, greed, or thinking they hit a jack pot and getting something for nothing... 95% of the time it never fails.


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## Calidecks (Nov 19, 2011)

My definition of lowballing, here's a real life example.

Home Depot sells certain decking products for less then they actually buy it for. This is by design a way to pull the contractor away from the competitor. Also it is intended to get the contractor to buy the framing and hardware from them also. So Home Depot lowballed Ganahl Lumber. This is a real case it happened with me. However, I still get my decking from my lumberyard, they have a price sheet set up just for me and it is good for each year. This allows me to keep my prices consistent. 

Using this same principle for bidding. A larger contractor will bid things very low, because he knows the competition can't. But it will bring them future projects, and keep the work away from the competition. To me that is lowballing.


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## brunothedog (Sep 8, 2013)

greg24k said:


> Custom jobs there is no such things to get a foot in the door. When custom jobs involved, Clients concerns are about the outcome of the job, not the cost of it and 95% of the time they will use a reputable contractor and they will not base theirs decision based on the price.


Client goes to Architect studio, I wanna build a house for my kids.
Ok, designs approved, now client saids "how much gonna cost me"
the studio saids " We'll send out a few proposals for bids.
% bids come in. ranging from 400- 600k.
Client ," whoa, why so much difference, who should I Choose?"
Studio, " they are all reputable Co.s."

The proposal they prepare for you says how each work will be done and with what materials they will be done with,
The Geometer, Engineer, Architect. are the "Inspectors over here, not the city or state.
they can and do question every work as to quality.
and they are being paid by the client.
If the work is done not to requirement, or code as ya call it, you will redo it, no if's, ands, or buts.

If these studio's don't give you a job to bid on, your in the dark as to whats going on.

Turning on the light, getting your name known, has zero to do with advertising, and all to do with those who give you an "opportunity to participate"
And you should know that keeping your self in the light is a never ending journey.


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## brunothedog (Sep 8, 2013)

> I don't know WTF this means.


It means once you got the job, money becomes just a proxy


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## Calidecks (Nov 19, 2011)

brunothedog said:


> It means once you got the job, money becomes just a proxy


What the phuck


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## brunothedog (Sep 8, 2013)

Californiadecks said:


> What the phuck


let me try again, ummm.. ok
once you got the job, the job your doing becomes the most important thing to them" Craftsmanship"
and they will remember you for that, a few of them anyway


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## Calidecks (Nov 19, 2011)

brunothedog said:


> let me try again, ummm.. ok once you got the job, the job your doing becomes the most important thing to them" Craftsmanship" and they will remember you for that, a few of them anyway


 That wasn't directed at you it was explaining the meaning of WTF :thumbsup:


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## brunothedog (Sep 8, 2013)

svronthmve said:


> Oh please, bestow some more corrupted and bankrupt wisdom upon us all! :no: :no:
> 
> You're exactly the type of contractor that hurts the industry for those who are trying to make a legitimate wage to feed their families!
> 
> You'd do well to stop blathering and putting out spam quality thoughts, and instead, spend that time reading here on CT and learning something helpful.


jesus christ, 
spam quality thoughts, i don't get it.
I hurt the industry, screw you, 
read and learn? wtf
I going on 40yrs. in business, my family lives good.

Construction isn't for everybody,

Try the military, They take all


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## CO762 (Feb 22, 2010)

Californiadecks said:


> Home Depot sells certain decking products for less then they actually buy it for. This is by design a way to pull the contractor away from the competitor.


Loss leader. But also, this type of strategy can be done to kill the competition and once the competition is out of the way, prices go back up.


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## svronthmve (Aug 3, 2008)

brunothedog said:


> jesus christ,
> spam quality thoughts, i don't get it.
> I hurt the industry, screw you,
> read and learn? wtf
> ...


40 yrs in business and this is all you can respond?

That truly is sorry.....but speaks volumes.


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## brunothedog (Sep 8, 2013)

svronthmve said:


> 40 yrs in business and this is all you can respond?
> 
> That truly is sorry.....but speaks volumes.


yeah, i know I'm not dat good with flashy replies and all, but my hands, on the other hand


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## Morbidzero (Aug 5, 2013)

Jaws said:


> Many things most contractors do are a recipe for disaster. Some are better at managing a train wreck than others. Look at the OP, I cant imagine doing what he is talking about, working my azz off for paupers wages.


Agreed. What kind of f up situation they must have that the government is telling them to compete on who can do the job the cheapest.


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## blacktop (Oct 28, 2012)

Morbidzero said:


> Agreed. What kind of f up situation they must have that the government is telling them to compete on who can do the job the cheapest.


 Like it's any different here?


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## mudpad (Dec 26, 2008)

blacktop said:


> Like it's any different here?


Hard bid public work is different here than what the OP describes because the public entity does not pretend to know what the "going price" for the work required is. Contractors submit bids based on what they think they can do the specified project for, including OH and P, and not some discount off some artificial "Going Price"


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## Morbidzero (Aug 5, 2013)

brunothedog said:


> jesus christ,
> spam quality thoughts, i don't get it.
> I hurt the industry, screw you,
> read and learn? wtf
> ...


Sorry mate but you are not running a business but rather the business is running you. Your not making a profit just earning your wages at best with that mentality.


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## blacktop (Oct 28, 2012)

......


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## griz (Nov 26, 2009)

Brunothedog lives in Italy.

He is just trying to tell us how things work in his end of the world.

He has no control over the bidding situation. I have heard of this type of bidding through out Europe. The starting "going rate" price is usually
generous. 

He should not have called it lowballing as that brings up a very negative perception in our country.


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## svronthmve (Aug 3, 2008)

griz said:


> Brunothedog lives in Italy.
> 
> He is just trying to tell us how things work in his end of the world.
> 
> ...


I understand what you're saying griz, but his "philosophies" on mercilessly undercutting the competition transcend cultural differences. I'm sure they STINK there as well as HERE....he just doesn't care.


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