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Have you ever had your written estimate used ONLY to lower someone else's contract??

Discussion in 'Bidding & Estimating' started by Sno ballz, Nov 1, 2005.

  1. Sno ballz

    Sno ballz Member
    Messages: 35

    Have you ever had your written estimate used ONLY to lower someone else's contract?? In other words, you get a call and RFP, you go to x location, provide a written estimate, only to find that owner of location x has a contract already with someone, and only wants your estimate to lower the contract value with his current plower?

    How often does this occur. What are the best practices to avoid this, other than giving verbal proposals only? Please help, I have a bid to put in tonight and I am suspecting this might be the case.
    Last edited: Nov 1, 2005
  2. Mick

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

    You must be dealing with a management company. Seems to be a common practice. Saves a lot on hiring someone to come up with their own pricing. My guess is they get all these bids, write the contract using the highest one to show the customer, then take the lowest one, shave off some percentage, then say "This is what we'll pay you to plow this site".
  3. kingriver

    kingriver Senior Member
    from alaska
    Messages: 216

    I agree with Mick, must be managment Co., I am familiar with it. We all the time get calls for estimates, (our add says ) FREE ESTIMATES, anyway I have been told they use our totals when actually hiring the work out stating that (------) bid it at $$$$. Maybe verbal is the way to GO !! Go verbal then when they agree get it in writting.

  4. Sno ballz

    Sno ballz Member
    Messages: 35

    Thanks for the replies thus far...

    Acutally, it's a small sub-division. I sent out flyers last weekend, and got an immediate call for an RFP from the association head. He told me he has been dealing with someone for some time already, but would entertain other ideas. Don't know if he is not pleased with current snowplower or not.

    I'll dig into it as much as I can before giving him any #'s. I already know what my bid will be based on some basic assumptions. We shall see. I do hope to get the contract though, it would be a cake job:bluebounc
  5. Sno ballz

    Sno ballz Member
    Messages: 35


    Well, got back from talking to the association Treasurer. I kept it to just verbal and had good dialogue. He has not signed a contract yet for this season, that's the good news. The bad news? His guy that he's had for several years only charges $45 per push!:realmad: Were talking like 12 $400k homes on 1 acre sites, sitting on about a 1/2 mile of road round trip. WTF?!

    Oh well, maybe its me......
  6. PremierLand

    PremierLand PlowSite.com Addict
    from detroit
    Messages: 1,572

    45 per push, just keep a truck there all winter long plowing and in one storm, go there 15 times. lol
  7. Mick

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

    I'm confiused. This is a housing association with 12 homes and 1/4 mile of road (1/2 mi round trip). They have had the same plow guy for several years who charges $45 per push. I'm asssuming one push per storm. By the way, people don't call you FOR an RFP (Request for Proposal). The RFP is what you get from them to develop your bid. Why are they taking bids?

    I have two suggestions. Get the RFP and develop an honest bid to submit.


    Walk away.

    Something doesn't seem right. Any half way intelligent person who manages to be a condo assoc president with a deal like that wouldn't even be considering other bids for fear of upsetting the current contractor. Just be aware that if you get it for whatever reason, you will have to fight for it every year. They're going to use the same tactic again of getting bids to see if they can get you to "sharpen your pencil".
  8. Dwan

    Dwan Senior Member
    Messages: 879

    Bid it high, if you get it great and if you don't then nothing lost.

    Verbal estimates are free but written ones cost $100 with that applied to the contract if you get it.
  9. kingriver

    kingriver Senior Member
    from alaska
    Messages: 216

    How do they expect us to believe that stuff. How in H--- could anyone make any money doing that job, fuel (3.00) @ gal, insurance, maintenace on rigs. Let the low baller for the past few years still push it. I think that the Ass-ociasson Head is jerking you around, trying to get it done for what, beer- can- bob was doing it for !!!!
  10. Olderthandirt

    Olderthandirt Member
    Messages: 74

    Was that $45 per house ? x12 + the rd. = $540 which sounds about where it should be
  11. Sno ballz

    Sno ballz Member
    Messages: 35

    Thanks for the replies -

    Mick - I gave him my honest verbal bid, and also mentioned that his current pricing was "way low" and I couldn't touch it for that. I did offer an interesting spin on my bid though that caught his attention. More on that later if something comes of this.

    Dwan - I agree (bid higher than current, but not too high) and did so.

    Kingriver - I thought that he was jerking me around at first, but the more I think of how he reacted to some of my questions, I truly believe he was being 100% honest with me on previous costs.

    Olderthandirt - Nope! This was what the sum of all the houses paid per push. So, $45/12 houses = $3.75 per house per push to clean their entire private road!
  12. Grn Mtn

    Grn Mtn PlowSite.com Addict
    Messages: 1,644

    I'm just jumping in the middle here, but you don't always lose out to "beer-can-bob", I lost a key commercial account that received excellent service last winter (black-top whole winter) and this winters bid I even made $300 cheeper over last winter EVEN with all my increases, but I lost it to a lower bidder, who is a large property maintenance company. Quite frankly I don't know how they are making any money at their price:confused:
  13. SLSNursery

    SLSNursery PlowSite.com Veteran
    Messages: 140

    Here is an idea to prevent spinning your wheels

    With the exception of blind bids, which are just filling in blanks and sending in the numbers you have, my idea would be to try to get information from people. I have found that even with the largest management companies there is some sort of negotiation. With the smaller deals, such as HOAs or Condos, just ask what the purpose of the bid is. Generally you'll be able to tell if the customer is looking for service or price. If you can get them to commit that they want you to provide a better level of service or that they are definitely not re-hiring a current contractor, rather than just shopping a lower price or chiseling down their current contractor, then it is worth looking at as a job. I have refused many jobs by asking if the potential client was happy with his service or not. One guy said to me that his vendor was fine, he just liked us and wanted a better price. I declined to even discuss the actual price for the lot, and basically said we'd probably be about double for the job (that turned out to be accurate after he told me what he was paying some time later). This stops the waste of time inquiries and eliminates the possibility that you are actually setting the price that your competition charges.

    It is more important to me that you price stuff out in your world, and for your margins, overhead, etc. rather than worry about whether or not another person can make money at a certain low price. If someone starts talking about how another guy can do it for less, I generally walk away and don't get into it with them. It may be stereotyping, but this sort of customer isn't really in any professional's target market, and I don't find the need to provide an education to them either. That type of customer probably doesn't value the overhead that a professional service is very likely to have. Remember, we are getting paid to do a job, not be an analyst.
  14. silvetouch

    silvetouch Senior Member
    Messages: 336

    I can definately appreciate your last post. I get calls all the time for bids like that. I always try and ask them if they are happy with their current contractor. If they say yes, then I usually just give them a business card and tell them that we don't try and take business away from someone doing a good job. I let them know that we would be happy to give them a bid in the future if they are looking for an improved level of service though. It does seem to help weed out the people just looking for a guy with a truck and a plow.
  15. little pat

    little pat Member
    Messages: 83


    Your last post was great. I think we all had that happen. Last year, before and during the season we had lots of these type of inquiries. Most came from gas stations that complained about poor service. They all seem to have the same story. They claim they pay good money and receive bad service. They ask me for a bid, which turns out to be at least double what they are paying. They then ask me for a break. No go. They get free money when they come to this country and don't pay taxes while they are here and we wind up supporting them. Now when I call on a customer, if I see it's one of them, I turn around and leave. I'm not wasting my time.
  16. cornbinder

    cornbinder Senior Member
    Messages: 348

    i've heard alot of good input from you guys. lets face this issue in another light also?how many times have
    our bids been used to set prices for the potential customers (in's) in which the bidding is already rigged, to where joe-blow collects all the bids then sits downwith his buddy beer-can-bob and shows him the prices, and boom, next thing you know budweiser bob is in there.