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First ever rebids

Discussion in 'Bidding & Estimating' started by fireside, Oct 30, 2008.

  1. fireside

    fireside Senior Member
    Messages: 726

    This will be a first after 20 years of plowing. I just recived back two bid packages i bid back in july per there bid specs.they were asked at that point if they could wait into sept. to see what happens, Now they want me to rebid there accounts do to the fact fuel has gone down and there business has slowed down for them and there cost have gone way up!! These are not new accounts i been doing them for 10 and 5 years with no problems. They NEVER ever call for anything. The final thing that got me was in the note the sanding price is to high it's just sand from the beach. I have been saving the paper clippings about sand and salt prices going up this year for the towns by 45 to 60 percent. that means for me if they pay $81 a ton for salt i'm at $110 plus trucking. thats bulk pricing. last year it was $65 for me delivered!! I sent them a copy of all of them there answer was to sharpen my pencil this year. I went up 5 percent on plowing and 10 percent on sanding.
    my cost have gone up 38 percent this year and my busIness is DEAD too. anybody else have this happen to. Do i rebid or tell them what i think they are both owner operated . THE BEST OF ALL THEY PAY SOMETIMES 60 TO 70 DAYS LATE. WHAT A WORLD WE NOW LIVE IN!!
  2. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    if you have other work , then stick to your guns...if you truely need there business you might reconsider

    I would tell them , ok sure , ill bid you cheaper, but there will be a fuel surchage for any fuel over $3 per gal ,

    also , since you didnt sign and secure your salt/sand early the price on that has gone up ..... so the cost of sanding your lot is now gonna cost you .....X .....
  3. iceyman

    iceyman 2000 Club Member
    Messages: 2,925

    how bad do you need the accounts?
  4. fireside

    fireside Senior Member
    Messages: 726

    I have penty of work for all the guys they just fit great in the route we travel 3/4 of a mile and do 7 accounts plus the there two. just after giving them great service they even got me 1 other account because they were so happy. after there last plow guys 7 in 3 years thats before i took over. you can tell all my accountsbecause most of the time they are the ones that are bare pavement. Work around here is getting really slow most contractors have no work after the end of nov. So i do understand whats going on and i think i was fair about my bids knowing about how bad things are getting.
    I have been using fuel surcharges for 6 years now after i took a big hit when fuel went up 3.75 per gallon mid season.
  5. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    well, then rebid it... If they are claiming its cuz fuel went down , then rebit it, and explain that your NEW fuel surchage will be X based on fuel at its current 275..... so basicly if fuel goes up , you charge them more..... it will at least give them good feelings that your trying.... Id still ask them if they want a new bid on sad that has gone up -
  6. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760

    Option A
    I wouldn't say boo.
    remember, negotiations have a time limit attached to them.
    Wait for them to call you

    Your bid is in, they haven't rejected it, they just countered without actually countering. (they didn't offer a price) and it's not a rejection.

    I'd just wait.

    2 days before a snowfall, they'll call

    Make them call you.

    this only works if
    a. you are willing to play hardball
    b. you are willing to lose the account.

    Option B
    Send back a new bid package with a HIGHER price. "well, I went over my numbers and I missed something, so the new price will be Z"
  7. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Are they saying you're just using sand from the beach? Maybe time for some education. Personally, I wouldn't back off the bid. No need to explain to them, but your costs have gone up. Also, for me, fuel is 5% of the revenue, so any adjustment would amount to around 15% (fuel decrease from July to now) of 5% or less than 1% of what you originally bid.
  8. 042500hd

    042500hd Senior Member
    Messages: 251

    If they were 60-70 day payers during good times. What will they pay during slow times? Slow paying customers kill small business everyday day we wait for payment is money we lose. Unless these are high dollar customers I would let them go just based on the payment terms. Just my $.02.
  9. bribrius

    bribrius PlowSite.com Addict
    Messages: 1,609

    I agree with lone cowboy on this.

    But if you stick to your guns or dont play along your probably going to lose this account. they may have sent it back because someone already bid cheaper and they wanted to give you another chance since your already were doing the work.

    I hear you on the contractors and things slowing down. Going to be lots of plows looking for money this year. I know things aren't good around my area. If you dont want to lose the account i say give them a call and see what is up and rebid it. If that is where your numbers are and what you need to make then let the first bid stand and see how it plays out. I would say they are just playing hard ball but given the economy..........
    sorry to hear.
  10. plowtime1

    plowtime1 Senior Member
    Messages: 446

    Don't jeopardize an account, let go of the ego; its easier to negotiate new terms. JMO
    Whether its good times or not, few our clients expect "0" tolerance and it is delivered, just as we expect our payment "0" tolerance within 15 days..plain and simple just make sure its in your contract language.
  11. natueboy

    natueboy Junior Member
    Messages: 22

    Dump them!

    I'm going through the same thing this year. I have a guy that still owes me almost 4,800 on his 11,000 bill from last year, and that mofo had the nerve to tell me he was calling to get other bids. I said "is that a sign I take it your not going to pay your past due invoice with me?" Of course not. He will. So I told him to take his bid double it, and count on me doing him last, and I told him I'd see him in court next Dumped that one. Next Ive done a group of 4 local business (same company) for 7 years, this year I raised the plowing 5% (contract for the year-they paid for 12 last year and i plowed 41 times) then I raised the salt 30%, and they said well we will cancel then. So, F*%$ Them to. and I told them when the time comes that the new guys cant provide and run out of salt, don't even think of calling me. Here's the best line Ive ever said.

    "you are no longer qualified to be my customer!" They didn't like that.

    So after all that, I decided to go through all my accounts and give up any that don't pay within 60 days. We do a good job for them, they never complain, and we get thanked like this. In our business there is no loyalty. None what so ever.
    Last edited: Oct 30, 2008
  12. plowtime1

    plowtime1 Senior Member
    Messages: 446

    Loyalty is hard to come by these days,I agree.
    Its not advantageous to some who cannot afford to hire a sales guy to let an existing slip by not trying to negotiate. You always need to step out of the box and also take a customers point of view to assess a concern to make your case clear. Also if you have a contract,if you have certain payment terms ;make sure you inform your customer by letter that they haven't honored the agreement. I realize this may seem ruff, but why give 100% satisfaction and have anyone step all over you. It is also your duty to adhere and stick to it; because once you or your customer deviates from it "as a course of doing business" its hard to win when it becomes a court case.
  13. big acres

    big acres Senior Member
    Messages: 653

    Mick and lonecowboy... like your answers. I just went through the same deal. A large HOA transitioned from the builder and the were looking around. I trust the manager (has told me pricing of other properties) and they were considering a lowballer at around 25% less. It is an anchor account that puts our equipment in the area to service a couple small accounts nearby. Rather than lose it, we met in the middle and now I will build a relationship with the new board and go from there. The plus side was that they recently added 20 units... and we bill per unit on this -AND we got the irrigation from the installer. We'll probably actually do better overall on this one.

    I would push the education, BUT resend your exact bid with a discount for early payment... might benefit you both. Good luck.
  14. ducatirider944

    ducatirider944 Senior Member
    from Iowa
    Messages: 469

    I would stick to my guns on the price, but offer them a 3% or 5% (I don't know the size of the bill) if paid with in ten days of billing. This way it shows that you are working with them. It's really not costing you anything, because fuel has dropped from when you bid it, plus you probably already locked your salt rate from other accounts. You might be able to keep the job, plus your not waiting 3 months for payment. How much is that 3 months costing you? Are you using a line of credit until you get paid? If so that is probably 7% on material costs or if your footing the bill with your own money, how much would you earn with it sitting in a savings account at the bank 1.5-2%? My concrete guy charges the same as all the other guys around here, and he gives a 2-3% depends on the size of the job, if it is paid with in ten days. He always has my money in less than ten days, but none of my subs ever go more than 2-3 weeks. Most have their money before 2 weeks. A lot of guys do stretch 30-60 days in my area, and it always pisses them off that my subs will blow them off for me!:D
  15. M&M

    M&M Senior Member
    Messages: 312

    "I would stick to my guns on the price, but offer them a 3% or 5% (I don't know the size of the bill) if paid with in ten days of billing. This way it shows that you are working with them. It's really not costing you anything, because fuel has dropped from when you bid it, plus you probably already locked your salt rate from other accounts. You might be able to keep the job, plus your not waiting 3 months for payment. How much is that 3 months costing you? Are you using a line of credit until you get paid?" Quote from Ducati

    Ducati is a man who knows business. Excellent advice. You will show the client you are trying to help him out by offfering a discount but realistically they will not pay in time to receive the discount. However, if you highlight the discounted rate as their total cost their perception will be in your favor.

    Another way to achieve the same thing is to discount the proposal (puts you in a good light) then have late payment penalties (they most likely will pay late.) Be sure to check with your accountant/lawyer on how much your state allows for late payment charges/interest.
  16. fireside

    fireside Senior Member
    Messages: 726

    i do offer discount on accounts payed in 10 days 3 percent. been doing that for years most of my accounts take up that offer. i have added this year 15 day payment and after 30 days is a breach of contract so no futher services into account payed in full.i had a bad feeling going into this year ! i also charge late fee's and intriest on unpaid ballance just like credit cards do.legal in this state. all my equipment is payed for cash so i have no bills (4 trucks and skidsteer all 2002 or newer) no credit is used to run snowplowing
    i meet with the owner this morning in person. i had a new bid with me with new terms plowing same as last year sanding stayed the same as new bid . fuel surcharge at 2.80 per gallon and added sanding surcharge in small print.added charges for ice melt and shoveling is now seperate. was included in plowing before. payment will now be 15 day or breach of contract and no services. he liked the new terms and signed i don't think he noticed it going to cost more now that everything is extra.
    penny wise dollor stupid just glad it all worked out.
  17. M&M

    M&M Senior Member
    Messages: 312

    Nice work. Keep us updated when the first bill goes out and payment comes in. His reaction or lack there of might be able to teach us all something.

    MIDTOWNPC PlowSite Veteran
    Messages: 4,554


    Hope this new way worked out for you. What I was going to suggest... but missed your reply that its a done deal.. anwaysy here goes

    Im not a fan of "playing auctioneer" with myself.

    I would suggest call and back and say whats its going to take to close this deal you seem to be expressing a concern in prices is there anything else that could help. I calculated my bid quite accuratly and perhaps a few percent discount could be arranged but is that really going to help you? Perhaps you are willing to drop the price a bit if you can have a condition that payment comes earlier. Or perhaps they need to be offered extended terms, for the full price.

    I had a similar one happen this year, they needed things cheaper, but really couldnt cut any services and didnt want to go to someone else. It was more about budgeting then the price. I moved them to seasonal rather then hourly. They got hurt last year cause there was so much snow and it was such large dumpings. So now its seasonal, salt and sand included. and I offered extended payments, 6 payments instead of 4. So the first one was mailed to me about 4 days after signing the contracts. To top it off we put the payments on the 15th of the month, so its easier to budget and swing cash flow vs the end of the month. Its good for both of us.
    Last edited: Oct 31, 2008
  19. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,953

    Thats very good advice, worked more than once for me. In addition to that remind them of the reliable service that you have provided in the past.

    MIDTOWNPC PlowSite Veteran
    Messages: 4,554

    Not to do with snow, but I have 1 tenant who every year takes a 5% discount and prepays the entire years rent at once. Its my favorite day of the year when I open that envelope.
    Its tempting not to go spend however.

    I have another customer who likes to pay his seasonal off before it changes to the new year. So he usually pays nov1, 15, dec1,15, 30 no discount though but its a nice to get.