Here is a second look at Don Short’s blog about whether or not to bid a project. Since I get a steady stream of calls from contractors who are trying to make that decision, I thought a re-post was in order.
To bid or not to bid? This is actually a question contractors must ask themselves when a project is issued. A lot of effort, not all of it being scientific, goes into making the decision to bid or not bid a project.
- In today’s market the contractor must make sure the owner/developer has adequate funds to pay for the work. Sounds simple, but it is not. For years the federal government has issued projects for bids with incomplete funding and so stated in their bid documents. Private owners are not so forthcoming about their finances.
- Does the project have a good quality set of plans and specifications? While a lot of people think contractors get rich on change orders, it is more likely contractors will lose money due to the changes. Changes during construction create inefficiencies for the contractors.
- Is the project easy to bid? Does it have a lengthy list of alternates that are a pain in the butt to price and keep separate? Given a choice, contractors would rather bid a project without alternates.
- Is a project worth bidding if the owner/developer is just keeping their “favored” contractor honest by inviting other bidders to submit? Most contractors will pass on bidding these projects. Some may even submit a complimentary bid to “stay in grace” with the owner.
These are just a few of the considerations given to bidding on projects by contractors and subcontractors.