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The Bidding Process

By on August 16, 2015 in Pricing and Estimating with 4 Comments

 Putting it all together

bidding The first step to any bid is of course to gather the quantities, whether you are measuring an existing structure or doing a takeoff from a set of plans. From there you must “extend” your numbers, either manually or by entering the information into an estimating program. There are many such programs available, such as eTakeoff at eTakeoff.com, Eagle Bid at www.evergreentech.net and PEP Cloud at www.paintestimating.com.

Once you have your calculations completed, there are still a few things to consider before the bid is ready to submit. Let’s look at some of these variables that can influence how you want to present any given bid, or if you want to bid the project at all.

Types of bids

As a preface, let me say that my focus here will be on bidding to general contractors, but many of these principals apply tobidding from plans dealing directly with owners as well.

First, you must determine what type of bid this is going to be. There are basically three types; negotiated, select, and competitive. Of these three, the negotiated bid is the most desirable. In this situation, an owner will choose which general contractor they want to run their project and negotiate a price with that company. With the negotiated bid, in addition to the price, your reputation for honesty, quality and how easy you are to work with can be deciding factors.

The select bid is the next best situation to find yourself in. It is similar to the negotiated bid, but rather than choosing one single general contractor, the owner will comprise a list of a select few that will be asked to bid on the project; usually three. As with the first example, your chances of winning such a bid are still better than with the typical, open or competitive bid.

The competitive bid is probably the most common of the three I have mentioned. This is when an owner puts a project out to bid on the open market so to speak. Your chances of winning a competitive bid are statistically the smallest. This doesn’t mean that you shouldn’t bother bidding on them, but it is something to take into consideration.

Proximity

The distance your crew and you have to travel to a job can have more of an impact than just the travel time involved. The distance to the nearest paint store, should you need supplies, can be a factor. What if you experience equipment failure? Supervision becomes a more difficult task as well. In light of such possibilities, you may want to increase your bid accordingly.

 Quality

 Basically, high quality work goes for a premium. “Blow and go” production type jobs don’t. If you know that a high level of craftsmanship is going to be required on a job, you will need to adjust your bid to account for the extra attention that will be demanded.

Time constraints

 Assume you are bidding an interior repaint of a school, it is summer and the contract documents stipulate that the work must be completed before school resumes session. They further stipulate that if you are not done by the deadline, that you must finish the work during evenings or on weekends, and/or liquidated damages will be charged to you for failing to meet the schedule; these can be substantial. These added constraints add a risk factor that again commands a higher rate than typical jobs.

Prevailing wage

These jobs are typically for federal, state, or city agencies, or for schools. With prevailing wage jobs, you will experience increased expenses for your bookkeeping needs, as you will often be required to submit “certified payrolls”, and see to it that your crews are paid weekly and at the prevailing wage required.

Owner/Architect/General

Who are these people? Have you worked with them before? Were they easy to work with? Did they pay on time? Did they honor your change orders? Were they difficult to please? Did they interpret the plans differently than you did? All these are legitimate questions to ask yourself.

Present work load

How full is your plate? If you presently have a substantial amount of work in progress, you may decide not to bid any additional work. If you choose to do so, you should bid it at a premium rate. You don’t want to submit a ridiculously high number, but you clearly have the option in this case to make the extra work well worth your while.

“Apparent Low”

OK, so you’ve submitted your bid, and you’re wondering how you did. In the case of “sealed bids”, there is typically a bid opening that anyone can attend to find out immediately who won. If you are the prime contractor on a project, you can typically contact the issuing authority and ask who won the bid. If you were bidding as a subcontractor, you can call and see which of the general contractors was the “apparent low” bidder. Once you know which firm won the bid, you can call them, congratulate them, and asked if they “listed” you for the painting.

Conclusion

When you do receive an invitation to a bid from a customer, respond to it, even if you are not able to submit a number at the time. It is common, that after a certain number of “no bids” from you, that you will be considered non-responsive, and dropped from their bidders list. Sometimes you just can’t help it, but when at all possible, submit a number. If you are not able or interested, at least respond and say “Catch you on the next one.”

Thanks to Lynn Jackson for this guest post.

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There Are 4 Brilliant Comments

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  1. Great article, very informative and it’s so true how time constraints can play a huge roll in the buyers decision. Definitely want to have the right crew working for you when push comes to shove!

    Keep up the awesome blog posts!

  2. I have been in the painting business for 10 years and I have found that pricing comes down to experience and what your exceptions are. How you position yourself in the market and the quality of questions you ask can play a big part. You can position yourself as a high end painter who does top notch work or a budget painter for more affordable options like apartment repaints. There is a market for both and from my experience you should make it clear which one you are if you want to be the go to contractor in that niche. Because clients will refer you to more like minded people.

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