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Anyone else seeing "FLAT RATE" bidding ?

Discussion in 'Bidding & Estimating' started by millsaps118, Oct 19, 2009.

  1. millsaps118

    millsaps118 Senior Member
    Messages: 694

    I put in 5 new bids about 2 months ago and just last week I found out I went 0-5!!!! These were comm'l lots ranging 1.75ac-5ac.

    I submit my bids with 2 options.

    1) Per Event Rates (1.5"-3", 3.1"-6.0", etc....) Everything else is additional/ala carte

    2) All Inclusive Flat Monthly Rate (Curb to Curb, Open up, Next day Clean up, salt) with a 1.5" trigger and a 55" seasonal cap.

    I lost all 5 jobs to 5 different contractors who all submitted "Flat Rate" prices. Meaning, if it snowed 3" the price was $300 or if we got 12" the price was still $300.

    My Per Event price on one job that was a little over 2 acres was $355 for 3", and it went up from there. The guy I lost it to, bid it Flat Rate @ $300!

    Is it just my luck that I was up against 5 different contractors who all bid these jobs the same or is this the new trend in bidding snow????????
     
  2. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    I have alway bid flat rate. I can't stand incramental pricing.
     
  3. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    Same here. Who decides if it's 5.9 or 6 inches? My per push customers are pretty good. If we get walloped, like a foot or more, or a long drawn out daytime storm, I might charge extra. Two visits charge 1.5. Three visits, charge 2.

    I like seasonals the best. Just keep it clean.
     
  4. cubicinches

    cubicinches PlowSite.com Addict
    Messages: 1,412

    That is exactly why we bid all of our stuff flat rate as well. We've never done it any other way, and have never had a customer ask for incremental pricing.
     
  5. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    At the end of the year, you'll have a couple of 2 inch storms offsetting a couple of 10 inch storms. It all evens out by April. Or May if you're Alaska Boss.
     
  6. millsaps118

    millsaps118 Senior Member
    Messages: 694

    Your suppose to decide if it's 5.9 or 6. I carry a tape right inside the driver side door pocket and measure from 3 random areas then take the avg. and that's how I determine if it's 5.9" or 6" and charge accordingly.

    So now I see where you flat rate guys make up ur $$ .... "If we get walloped, like a foot or more, or a long drawn out daytime storm, I might charge extra. Two visits charge 1.5. Three visits, charge 2."

    I agree with your last reply, seasonal is, IMHO, the fairest way to bid.
     
  7. Camden

    Camden PlowSite Fanatic
    Messages: 6,598

    millsaps - Flat rate pricing is par for the course up here. People seem to want simple pricing that's easy for them to understand.
     
  8. big acres

    big acres Senior Member
    Messages: 653

    I guess if you really know your weather history... seems like a gamble to me. I've bid against a couple here, but don't see it too often.

    If we get 15 events per year and 48" of snow average, what's to say it doesn't come in a few bigger snowfalls?

    You could have 8 x 6" at $300 = $2400

    OR

    12 x 4" at $300 = $3600

    Same amount of seasonal snow, but numbers are quite a bit different.

    I'm sure the idea sells well, so good luck, but the incremental mirrors actual hours on site better and IMO is fairer to both you and the customer -still giving them some solid numbers, but paying you more for bigger jobs.

    Not saying it doesn't usually come out in the wash... just a preference I guess.
     
  9. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    I think it's somewhat localized too. Around here people are just used to doing it that way.
     
  10. cubicinches

    cubicinches PlowSite.com Addict
    Messages: 1,412

    It's the norm around here too. I want pricing that's easy for ME to understand as well. We're too busy plowing to be measuring. I can't imagine the amount of customer disputes that could arise from all of that.
     
  11. millsaps118

    millsaps118 Senior Member
    Messages: 694

    I have always been an incremental bidder or seasonal rate. I have always felt that I would be loosing my shirt if I started bidding flat rate. I just can't see how profitable it can be to bid a lot that would take 1 hr @ 3" and charge X and then plow the same lot @ 9" and still charge X but takes me 2.5-3x as long.
     
  12. cubicinches

    cubicinches PlowSite.com Addict
    Messages: 1,412

    It's easy... charge the 9" rate all of the time. Now look at the money you make when it's 3"
    payup
     
  13. doo-man

    doo-man Senior Member
    Messages: 387

    Yeah lost couple today to flat rate bids and another to hourly rate! Funny part was the customer said it should only take 20 min so if he was charging 60per hour that would only cost them 20 dollars!!!! I measured the lot at just over 30,000sqft Some people like to work for free or beer money but not me !!!!
     
  14. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    6'' snows are 2 pushes no matter what.
     
  15. millsaps118

    millsaps118 Senior Member
    Messages: 694

    I'll agree with that but, how hard is it to understand,

    2"-3"= $100
    4"-5"= $150
    6"-7"= $200

    etc.etc..... 90% of my snow contracts are like that and I have yet to hear a dispute about charging a customer on how much snow I plowed during a snow event.
     
  16. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    Don't you think he is going to charge a one hour min?
     
  17. millsaps118

    millsaps118 Senior Member
    Messages: 694

    So...correct me if I'm wrong, I might not be reading you right. Your saying that you would charge 2 times for a 6" snow event? If so, that wouldn't be flat rate pricing. That would be slipping one under the table on 'em.

    I can see way more of a dispute from a customer with this then if there was 5.9" and they got charged for 6".
     
  18. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    It would take me longer to move 9" vs 3", but it wouldn't be three times as long. I don't think it would even be twice as long. Depends on the account to. Bigger snows have more impact on parking area than a road/drive.
     
  19. wizardsr

    wizardsr PlowSite.com Addict
    Messages: 1,557

    Keith, I haven't seen it on commercial yet this year... Dunno... We do flat rate on residential, but that's so it's easier for the little old ladies to understand... On commercial, we go with 1.5-5 and 5-8, makes it easier than the 1.5-4, 4-6, 6-8 that we used to do. Seems like 90% of the events we get here are under 5", so the only challenge has been getting the customer to understand why my 1.5-5 is a little higher than the next guy's 1.5-4... I may be forced to go back to smaller increments next year to stay competitive though, way too many customers only look at that first number... Sorry to hear about your strike out, seems to be the norm this year. I don't know who the heck is getting all the work, but it hasn't been me or anyone I know around here...
     
  20. doo-man

    doo-man Senior Member
    Messages: 387

    You would think but the customer told me today that info! I was asked to bid it per push by the inch's incriments and this guy goes in and bids by the hour! WTF I am sick of this crap :mad::mad: