Most builders find competitive bidding frustrating and unfair — a potential waste of time and resources. By contrast, consumers see it as fair and reasonable, something contractors in a tough market should offer without question.
I’m not saying I never bid, but I’m careful about which jobs I bid on. One problem with bidding is that there’s no basic set of rules for all parties to follow. So I created my own set of requirements that the client and the project have to meet. This doesn’t guarantee that my bid will be accepted — but if it is, the job is more likely to start off on the right foot.
Know When Not to Bid
If you’re playing the bidding game, give yourself a fighting chance to win. The work that goes into assembling a thorough bid is substantial, so you need to evaluate your chances of being awarded the contract before investing all those hours.
First, I don’t bid on jobs when there are more than two other bidders; in my experience, these jobs almost always turn out to be difficult. If the clients are evasive about how many bids they’re getting (which they usually are), I’ll press the question. If they still seem unwilling to share this information, I’ll pass.
I also ask for full disclosure — from both the client and the architect — about the home’s history of ownership, what remodels and repairs have been done in the past, and whether there are unusual conditions like foundation settling or high groundwater. In addition, I want to hear about any relevant dealings with the homeowners association.
If we make it to this point, I always ask two further questions: “What is your top priority for this project?” and “What are your expectations regarding quality, budget, and schedule?” The answers generate discussions that help me decide if the job is a good fit.
I won’t bid on projects outside my experience and expertise. The fact that you’re a great kitchen remodeler doesn’t mean you can profitably build a two-million-dollar custom home. Professional growth should be taken in manageable steps — and going from kitchen and bath jobs to an expensive new-build is too big a leap.
You should also get some background information on the clients whenever possible. Call the architect and anyone else you know who might have worked with them to find out how past jobs went.
Insist on Complete Documentation
This is the most important requirement. You need finished plans to generate a realistic price, schedule, and contract. Incomplete plans and specs are one of the biggest sources of problems and disputes; if the plans aren’t finished, I’ll pass on the job or postpone bidding until they are.
Of course, plans and specs are almost never 100 percent complete or correct. Mistakes, omissions, and code violations are typical, as are boilerplate details that have no relation to the project. That’s because completing the plans requires homework, decision-making, and commitment, things many people have problems with.
I’ve seen plans with 20 allowances — a sure sign that the clients are unable to make decisions. Something as simple as “We want a flat-screen TV, but aren’t sure which one” can cause big delays if you have to frame a precise wall opening for it. Insisting on finished documents tells the clients you expect them to be committed to their choices before the project starts. Allowing them to postpone those decisions will only complicate things later.
Unfinished plans can also create an uneven playing field between bidders, as each bidder may make different assumptions about what’s called for.
Offer to Help
One tactic that has worked for me is to offer to complete the plans and specs for the customers. Years ago, I coined the term “professional services agreement,” or PSA, for this arrangement.
The process is fairly simple. After our first or second meeting, I write a memorandum outlining the information I need in order to finalize the bid. I organize the memo into alphabetical categories: appliances, bath fixtures, and so on. I end it with a request for a two-hour interview. Later, after the interview, I’ll spec everything from the dishwasher to the door hardware, then get back to the clients with a list to approve.
It’s important to get paid for this service. I’m more than willing to help, but I need the PSA and a retainer payment for my time and professional expertise. If the clients choose me to build the project, I apply the retainer to the job.
The tactic has been helpful in filtering out problem customers. When I suggest it, some customers can’t get away fast enough, while others love the idea. Generally, the people who have built or remodeled before understand the need for complete plans to reduce conflict during the project, and will either take me up on the offer or finish the work themselves.