Tag Archives: budget

A Modest Suggestion to Improve Budget Checks

I’ve written before about conceptual estimating and some of the challenges that it presents.  We conceptually estimate whenever the plans and specifications are too incomplete to facilitate a normal contract.  This means that conceptual estimates do not constitute a binding contractual obligation the way they do on a “real” or “hard-bid” situation.  Correspondingly, the client is typically under no obligation to award a contract, or even select a contractor for future award based on a conceptual bid.  It’s supposedly mutually understood that conceptual bidding is a courtesy that contractors extend to clients and their design teams to facilitate future work.  Many General Contractors (GC’s) see conceptual bidding as an opportunity to get in front of the client.  They hope that their investment in conceptual bidding will lead to contract before all the drawing stages are completed.  This is known as client capture.

A Modest Suggestion to Improve Budget Checks

You’ve got to enjoy those victories

The Architect knows more than they’re letting on

Before we go much further we need to address some of the misconceptions about what’s really going on.  First and foremost, we need to understand that the professional with the most information, and the most authority to make informed decisions to align the design with the budget is the Architect.  The American Institute of Architects (AIA) has recommended policies and procedures for the project process.  These policies aren’t shy about demanding not only budgetary information, but insight into how the budget gets approved, who might be opposed, and what can be done to ensure the job moves forward.  The Architect knows what features must be included and they know the budget they’ve got to hit in order to get the job approved.

Further, any Architecture firm with sufficient experience has an impressive backlog of information for the costs of past projects.  This information is far, far, superior to what any individual GC might have because they have access to not only the awarded bidder’s proposal, but the losing GC’s bids as well.  This is profound feedback on their design that they can collect every single time their plans are bid.

Not only are the Architects sitting on competitive bids for their plans, they’ve also seen the change order costs for all the projects they’ve built.  They have a uniquely accurate insight into how costly missing, incomplete, or changing information can be on an issue, by issue basis.

Inflection point

This brings me to one of the most canny contractual moves I’ve ever seen.  The AIA writes the vast majority of construction contract templates.  It’s therefore not surprising that these contracts absolve the Architect of any responsibility for the financial outcome of their work. So when the lowest bid they received blows the client’s budget, the Architect isn’t responsible.

This makes a certain degree of sense because the Architect is independent of the GC’s bidding the job.  They can’t be held responsible for market conditions, or contractor business decisions that are outside of their control.

A Modest Suggestion to Improve Budget Checks

However, this absolution of responsibility has opened the door to corruption.  Architects and their design teams can, and do, sole specify vendors who inflate their prices because they’re protected from competition and transparency.  Everyone in the distribution chain realizes that exposing the corruption to win a single job, may cost them competitive pricing on everything else they’re bidding.

Playing dumb is a costly game

It’s obvious that an Architect can’t do their job without knowing the clients budget as well as their project expectations.  It’s also obvious that an Architect couldn’t be expected to balance the project expectations with the clients budget, unless they had a sense of how much their design would cost.  This working knowledge is a function of the Architects experience.  Taking this one step further, it’s therefore obvious than an experienced Architect has very little excuse for blowing a clients budget.

GC estimators receive Request For Proposals (RFP’s) from the client or their architect which outline the expectations and obligations for the bid.  These vary in formality, however the basics of the bid and subsequent project are provided to all invited bidders.  Some government projects are required to show the estimated project cost on every RFP.  It’s very rare to see this information provided anywhere else.

Conceptual estimating requires the bidders to fill in the gaps in the documents.  This means that a conscientious bidder is forced to make design decisions and price them in a competitive setting.  While there may not be a contractually binding obligation to honor their conceptual price, a bidder is aware that it is unprofessional to provide erroneous or misleading information  Experienced bidders know that clients and design teams virtually never remember the qualifiers, clarifications, or exclusions.  The lowest number they got is what they’ll remember.   In tight markets, clients may have several GC’s bidding each stage of plan development.  This can mean three or more rounds of competitive bidding before the final contract award.  Every GC may have two dozen trades, with three or more subs per trade.  The collaborative cost of all these estimators pricing a project through its document development is staggering.

A modest solution

The entire point of a budget check is to verify that the design cost won’t progress outside of the clients ability to pay.  If things aren’t adding up right, it’s easier to scale back earlier in the process so the final Construction Documents (CD’s) attract acceptable bid amounts.  The budget checks are tied to plan development stages which are known to the design team and the client.

For example, a 50% design set may only have the major  Heating Ventilating, and Air Conditioning (HVAC) equipment located on the plans.  The Mechanical Engineering consultant may need to run some calculations to make their final specification selections, but they know the magnitude of the final system and how it will correlate to the mechanical portion of the project budget.

If the 50% drawings don’t provide the estimated magnitude of the system so the HVAC bidders are forced to fill in those blanks to conceptually bid the job.

A Modest Suggestion to Improve Budget Checks

Efforts to improve engineering transparency are ongoing…

Basically the conceptual bidders are pricing their vision of the project rather than the design teams vision of the job.  Design changes implemented on the conceptual pricing feedback aren’t actually based on universal comprehension of the original plan.  If the HVAC bidders filled in the gaps with unnecessary or inefficient selections, they’re pricing a completely different design than the design team had in mind.  Since conceptual estimators are wary of angering clients when the low-cost assumption is shot down, they may skew to higher cost answers to guard against the unknown.

We have a situation where Clients are asking if the design is on track, and the bidders are playing guessing games with the designers intent.  None of the answers are meaningful because the most insightful information isn’t provided.

I propose that RFP’s for budget checks include a design-team estimate breaking down the clients budget into Construction Specification Institute (CSI) Masterformat divisions.  The Mechanical Engineering consultant in the above example would provide rough magnitude descriptions of their planned equipment along with budget allowances for each component.

The context of the RFP completely changes because the design teams budgetary assumptions become the baseline of conceptual estimating.  Instead of asking what some poorly rendered thing costs, the RFP asks if their plan is on track.

The GC’s responding have a uniform means of quantifying the scope, and they can identify budgetary inaccuracies on a line-item basis.  This not only improves the design teams understanding of what’s driving their budgets, it also reduces the GC’s risk in answering conceptual questions.

This also resolves the ticking time-bomb of last round changes to the plans that suddenly reveal costly items that were always expected but never communicated during earlier budget checks.

A Modest Suggestion to Improve Budget Checks

“We found a few concerns in the Landscaping budget…”

What would need to change

For starters, Architects would need to become more transparent and accountable for the impact of their decisions.  Currently, budget checks are like a theatrical production intended to feign concern for staying on budget, while collecting the means to blame GC’s when the job comes in over budget.  Budget checking doesn’t need to be a charity effort in an Architects theatrical production of “The budget is blown” starring “The angry client”!

Budget checks are not offering a fair contract award to the lowest bidder in exchange for a free bid.  Since there is no legitimacy without reciprocity, the bids shouldn’t be free.  If we can agree that it’s a professional courtesy that’s necessary to foster market growth, we should be able to agree that Design teams need to be more respectful of the markets time.  Basically, if the design team knew what they were doing, checking their budget should be a simple process.

There is an obvious need for Architects to have their own in-house estimating, scheduling, and management professionals.

Likely resistance

The fundamental link between design intent and cost outcome cannot be waived aside in the context of a budget check.  Either the Architect is a responsible and capable professional, or they’re just hoping whatever they draw will pass budgetary muster.   Architects may feel they have little to gain by transparency in inverse proportion to their professionalism.

Admitting that to their cost knowledge may lead to clients demanding that they pay for design errors and omissions.

A Modest Suggestion to Improve Budget Checks

Even when they’re spiraling out of control, Architects will color coordinate!

Of course, there would be fewer change orders if the budget-check process was actually grounded in a meaningful process to correct the Architect’s course via contractor feedback.  Also, the budget-checking may provide sufficient pricing information to later argue that change orders are overpriced.

Incompetent design-teams won’t likely be any better at estimating than they are at Architecture.  Budget checking an obviously flawed estimate isn’t going to be fun for GC’s looking to impress the client.  However GC’s will benefit from having a real black-and-white illustration of the Design teams competence to refer to on bid day.  Clients may fail to recognize the nuance of a complex architectural depiction, but they’ll be able to see how their Architects work fell short of what they promised.  It’s politically difficult to tell a Client they’ve hired the wrong team, but a red-lined estimate showing where and why things were wrong may send the same message.

Adding estimating and management staff to a design firm may be seen as an onerous obligation. Many design teams have been able to operate on fuzzy program designs that fall well-short of being an accountable estimate.  Plausible deny-ability is built-in via sloppy and opaque documentation.  Nevertheless, design firms are selling their clients a promise to responsibly translate their clients vision and budget into a successful project.  Clients looking for a qualified architect should focus less on computer-aided design innovation, and more on sound business practices.

Likely blow-back

The entire concept of client capture via conceptual estimating would be effectively turned on its ear.  Rather than telling the most compelling story of how the job might be done, conceptual bidders would be editors to the Architects narrative.  For firms that have been successful with client capture, the budget check as I’ve proposed would offer much less latitude to sell the client on your companies abilities.

There’s nothing about my proposal that addresses the possibility that the final round of bidding could still exceed the clients budget.  Market factors like seasonal rushes or shortages can have profound impacts on the bid-day amount.  We all have to cope with factors that are outside of our control.  However, it’s worth pointing out that GC’s could inform their potential clients of changing market conditions that would affect their budgets.  Additionally, the Architects estimate defines the limits of the scope intent which reduces risk, which in turn lowers pricing from the GC’s.

By a wide margin, the group most likely to oppose my proposal are the cabal of corrupt professionals who would find it harder to maintain their business practices.

A Modest Suggestion to Improve Budget Checks

Derek is just trying to build the only way he knows how…

If Architects were to reveal the actual cost of corrupt vendor material, it would immediately attract the clients attention.  Even having a placeholder for a future sole-specified product would attract the bidders attention leading them to offer more cost-effective options.  If the Architect attempted to add the sole-specified vendor in the final round of bidding, the budgetary impact would be easily audited. GC’s who participated in earlier rounds of budget-checks would be quick to identify the chicanery to the client to explain why the budget jumped.

Some GC’s may be opposed to my proposal because it indirectly illustrates their faults.  If the architects estimate is based on contracted amounts of similar work, they’re providing accurate information about what market value pricing is supposed to look like.  There are some GC’s who’ve never actually seen a market-value subcontractor bid because their approved subcontractor roster is so limited.  These GC’s will initially inform the Architect that their budget for that scope is too low.  Architects with several GC’s checking their budget may find that they can tell when a GC has an overpriced sub on their roster.

The next round of budget checking would tell all the bidders how they compared to the winning team.  This neatly side-steps the insidious nature of GC’s who withhold bid results from their subs.  It won’t help the GC’s who prefer to avoid transparency, but it will help the industry to be better informed about the going rate for work.

Final thoughts

If the market is helping the client to achieve their goals, it’s only fair that the process should help the market to be more successful. Estimating should never be free.  If you’re not winning a contract award, you should receive feedback on how to win the next time.

Lots of subs would be far better off by bidding to a more competitive GC.  GC’s need to know when they’re failing to attract market leaders so they can correct course.  Bureaucratic inertia and dysfunctional relationships lead to lots of wasted opportunities.

Architecture firms seeking to market their abilities to potential clients would have a market-proven means to show that they can design within the clients budget.  Undermining this fundamental concept is where our industries contractual adversity takes root.  True professionals must raise the industries standards to shed daylight on the scoundrels operating in their shadow.

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© Anton Takken 2016 all rights reserved

 


Closing the Deal

Your client has heard your pitch or read your proposal. You’re confident in your estimate, and the players involved. The client hasn’t green-lit your proposal, and the scheduled start date is looming.

Every client or design team question is a red-hot priority to get answered. Whatever else you’ve got to do will have to wait. As days creep by there’s still no contract award. What do you do?

focusing

It’s just so close!

Estimators suffer a tendency to think like…estimators. Specifically they tend to focus on measuring and pricing items rather than considering what’s been presented to the client. Adding to this problem, Estimators might be accustomed to competing against their peers in the market. This implies that a general level of knowledge and skill is present among competing estimators. No such criteria exists among clients . Clients may not understand industry practices, terminology, and jargon.

Well I’m the low bidder, surely that’s enough for them!

Consider the case of a one-time builder like a standalone retail building. The client may have little to no personal experience with the construction industry. However they have doubtlessly read about State or Federal projects that became boondoggles through mismanagement and greed. It’s a grave concern to an individual that cost over-runs could put them under before they can even start. The tighter their budget, the less likely they are to have contingency funds to pay for change orders. This is a serious commitment, similar to hiring a surgeon. Clients need the project to be successful on their terms. That means defining and addressing whatever they’re most concerned about.

The key to closing is knowing which door is open.

opportunity

Don’t be like this guy

Time Critical

Some clients will be especially sensitive to deadline delays. Retail establishments that aren’t open in time for major shopping seasons can face financial ruin as a result. Office remodels might entail renting a temporary space, effectively doubling or tripling their rent during construction. Clients like this would be looking for a firm schedule commitment in the bids they receive.

Competence with Complexity

Other Clients are primarily concerned with the functional outcome of complex systems. Factories, or manufacturing facilities might require extensive coordination between; Architects, Engineers, specialty contractors, equipment purveyors, and the build team. Clients in this case might need a General Contractor who can take the many demands of all these disciplines and direct the resources towards a successful outcome. “By the book” bidding practices won’t carry far with these clients. Problem solving, conflict resolution, and strong leadership need to be promoted to attract these clients attention.

Perfect Craftsmanship

Certain clients want perfection in terms of craftsmanship, and materials. These clients are willing to hire strong design teams with well-defined construction documents.   Top-tier subcontractors deliver the sort of performance these clients are looking for. These clients want to know you’ve vetted every tradesman you’ll have working on their project. The best indicator of future success is past performance.

perfect

“Tight fitting woodwork is our specialty.”

Proving your abilities with a portfolio of similar work is a good approach. Appearing “cheap” may work against a bidder.

Bid Packet Perfection

Municipal, public, and institutional clients often have regulations and policies they must adhere to. These regulations may give preference to specific groups like Women Owned Business, or Minority Owned Businesses. Depending on the policies, these clients might have a percentage of participation for these groups in terms of contract value. Proving the percentages with the correct paperwork, on complex jobs often leads to minor discrepancies. Winning and losing these bids can be as simple as getting the paper work correct. I’ve encountered urban city projects that were re-bid because there wasn’t a single GC who had submitted an error-free proposal the first time! These clients can’t accept an incomplete/imperfect proposal so it’s very important to prioritize accordingly.

Corral the Committee

Sometimes the client is a committee tasked with reviewing the proposals and awarding the contract. In the best of cases, this is a smooth democratic process. More often, it’s an exercise in scope creep. Questions regarding the project quickly move to the hypothetical. Before long, you’re attempting to give accurate schedule, budget, and permitting feedback on something imagined within the conversation!   Committees lacking firm leadership are long on good intentions and short on decision-making. It’s critical to understand that these clients won’t make decisions any faster once the project is underway.

traffic

Moving to item two on our agenda for today…”

Projects rarely get schedule extensions so unanswered questions can pose significant risk. Kindly rise to the situation and fill that leadership gap. Diplomatic but firm direction keeps the committee on task and gets everyone where they need to be. Done well, they’ll be satisfied that your firm took their direction properly.

All inclusive

Clients with Design-Build projects have an entirely different perspective than others. Lacking an Architect’s representation, these clients are looking for a turn-key proposal which effectively delivers them their vision of the project within the schedule and budget submitted. These clients generally perceive change orders to be impossible since “you designed it”. Whatever schematic design documents were provided will be expected in your proposal regardless of how vague, misleading, or apparently irrelevant. A history of previous successes might be significant with these clients as well.

Brass tacks

Finally, there’s the budget-conscious client. These clients occur at every tier and there’s just nothing for it but to be low bidder. Clients with high expectations and low funds often arrive at bid day to find they’ve blown their budget. Estimators are often too discreet to ask the client how far the budget is off. Lacking this information, they’re unable to determine how much needs to be cut. This leads to playing guessing games with breakouts, alternates, and value engineering. Estimating is NOT GUESSING. Throwing out whatever might save money is a foolhardy practice that consumes resources, generates risk, and lowers profitability. It’s a terrible practice that desperately needs to stop. Every number you provide can be used against you later. Many GC’s have unit-priced their way into an unprofitable project by “helping” an underfunded client.  Charitable donations should at least be tax-deductible!

lil'help

That escalated quickly!

It may help to be reminded that the Architect typically knows the clients budget at the earliest design stages. They also know the clients priorities for the project. Some features are naturally more critical to the client than others. When it comes to big budget gaps, the Architect should be involved. Working together with the Architect reduces the odds that they’ll reject your suggestions later.

“Your number was competitive, I’m still deciding which way to go.”

It’s absolutely imperative that estimators recognize the connection between time for consideration and pressure to act. The deadlines for bidding are a source of pressure for all bidders. Get it done by this day, no excuses, no exceptions. Clients who marinate on the proposals for longer than you had to bid aren’t playing fair. It can be extremely difficult to get the clients attention after the bid. Stay after it because more time translates to less pressure. Dithering clients might be approached by a competitor who captures an opportunity to revise their proposal to meet some previously undisclosed demand. Now that competitor is “working with” the client. Potentially generating inertia away from the actual outcome of the bid via trust-building rapport.

An alternative to “hard sell” tactics

If a client say’s that you were competitive but they can’t make up their mind, it’s time to get curious about that. Inquiring about your performance in the market is a modest recompense for the effort to deliver them a bid. Rather than “hard-selling” the client, I recommend professional inquiry to figure out what “doors” of lingering concern are open.

What’s driving their decision? Narrow it down with helpful options like duration, budget, experience, competence, etc.

Once you have an area of focus, you can reference your proposed answer to their concern. Very valuable feedback is often provided at these junctures. The purpose isn’t to argue or cajole the client, it’s to determine how your bid compares to your competitors*.

*Note: Bid scope comparison is not to be confused with bid AMOUNT comparison. Sharing, conspiring, or otherwise conveying the monetary amounts that are not read aloud at a public bid reading constitutes bid shopping which is definitely unethical and potentially illegal.

Sometimes a difference in proposals is easily explained. Offering polite and restrained suggestions about what your competitor did differently might help shed new light on your proposal. If your competitor’s approach on some issue was superior to yours, you have an opening to admit it. Often we’re forced to decide between options relating to scope or schedule. If the client prefers your competitors choice, you might be given an opportunity to revise your proposal because you were reasonable.

Walking the client through their concerns might open an opportunity to address something they hadn’t mentioned previously.

dragon

“Sure we can add… dragons… to the pole lights…”

Factor this feedback into the new opportunity so you can capitalize on it. Present a revised proposal that’s worded with sensitivity to the client’s concerns. This communicates a commitment to resolving the clients concerns. With all their concerns met, you can then follow-up and simply ask for the job.

Leadership

I hear a lot of folks shy away from sales because they don’t want to pressure people into a decision. If sales was strictly about approaching people at random, they’d have a point. In the context of a bid, the client extended a Request For Proposal or an Invitation to bid through their Architect. Their proposition, greatly simplified is; be the best bidder and you’ll be awarded the job. It’s therefore expected that the client will award the job to the best bidder. Clients may be overwhelmed by the amount of information to compare. They’re rarely trained estimators who are used to scoping proposals in terms of potential risk and profit.

The situation demands leadership. Staying on the sidelines because you’re too polite to provide follow-up means you’ll be awarded fewer jobs than you won. Trust is a powerful thing. A knowledgeable and seasoned professional can assuage anxiety and establish trust with a client. Clients sometimes award their project to a higher cost bidder, this is how and why that happens.

Holding ground

You won’t always be the low bidder. In some ways that’s as much an asset as a liability. I’ve heard it put succinctly like this : It doesn’t matter whether you win everything you bid or lose everything you bid, you’ll be out of business eventually.

Knowing that some folks take longer to learn than others, it stands to reason that eventually you’ll be bidding against someone who hasn’t figured out why they’re on such a winning streak. Your bid should ALWAYS be representative of your best effort to profitably win the job. Let nature take its course with reckless bidders.   Let the buyer beware.

outside line

Taking the outside line brings its own risks…

 

Clients that indulge in “comparison shopping” by crowding the line or stepping over into bid-shopping are doing so to gain a better deal for them. Many business owners view this as an opportunity to “trim some profit” to land a contract. In doing so, they invariably look toward gouging on change orders to recoup their “investment”.

It really doesn’t take much life experience to see how this ends up. The client is reluctant to hire that GC again because they were so aggressive with change orders. The GC’s potentially recovering from an unprofitable job and a scarred reputation with the client. Often they’re looking to “make it up on the next one“.

The legitimate low bidder might well have built the job for less simply because their bid included sufficient funding to keep their operation running smoothly without needing to gouge on change orders.

It’s a chain reaction of dishonest actors trying to out-fox one another to the detriment of all. Life becomes parody when such a client calls you to say they need your help because they don’t want to hire their low bidder. If they didn’t want to contract with that GC, they could have excluded them from the bid. The client started the problem by cheating the last time, now they’re doing it again. Dishonesty calls everything into question. The client’s premise is based on dishonesty, so it’s reasonable to suspect the story is false.

In fact the only thing you know for sure, is that the client is willing to be dishonest wherever it benefits them. Diseases like Yellow Fever, Typhoid, and… Greed, need to be quarantined before they spread to others.

got moves

The start is slick and graceful but it always ends with a busted beak.

Setting a precedent

The answer is to hold the line on your price. If you did everything properly, your proposal is as close to market-leader as you could make it. Bids are a lot cheaper when you’ve missed something important, like paying your overhead. That doesn’t make them market value. If the client was bluffing and your proposal was already the lowest legitimate bidder, they may award to you anyway.  You can’t cheat an honest person. Setting this precedent with the client at the outset reduces trouble down the road.

Reinforce the precedent

Entering into a contract with a dishonest client doesn’t improve their character. It merely binds you to a client who will cheat you every chance they get. The most common tactic is to demand changes to the scope right now because they’re in a hurry, verbally (off the record) promising to sign your change order. Once the extra work is done, they’re suddenly interested in disputing the change order price. Again the solution is to hold the line*. Extra work requires contract modification, full-stop. Be friendly, be motivated, be firm. You’ll be amazed at how fast they can get a change order processed when they really need to.

*Note: there are RARE times where extra work must happen without a change order first. For example if the building is flooding, you must shut off the water main THEN ask to be paid for your trouble.

Dishonesty is a form of laziness, cheaters quickly tire of losing arguments with honest professionals.

Another thing to consider; additional work takes time. In the eyes of a contract, if you were late because you were busy with not in contract work, it’s your fault even if the client benefits from your extra work. Simply put, if freebie extras make you late, they’ll punish you all the same. Little things add up quickly, especially when the client’s getting them for free.

rich

“You were late so… I’m gonna keep the extras!”

Negotiations are rarely simple

When negotiating, remember that completed work doesn’t get cheaper after the fact. Discounting, bargaining, and horse-trading are all better done BEFORE resources have been consumed.

Value reflects the balance of perceived asset and liability to a given party. If the client already has the asset, all you have is the liability. This means the client has leverage in negotiating the value because you aren’t even breaking even (earning back your liability) if they refused to pay altogether.

The whole reason that market value persists is because it’s beneficial to both parties. Looking at negotiations requires a willingness to be macro and micro in your perspective. Doing some portion of the scope at a loss is a micro perspective, doing the whole job at a profit is a macro perspective. Micro relates to Macro, because herd of little parts done for free can push the profit out of the whole job . Understanding what the client values provides a basis to work from. As silly as it sounds, a lot of clients get hung up on the value of something small. They may want a “victory” to report back to their superiors. Keep a rolling total in your mind of where things are headed. It might make sense to do something at cost to move on from a minor issue.

Some clients mistakenly believe that breakout pricing is how they’ll succeed in lowering prices. This transparent effort to demand the means to bludgeon contractors isn’t successful because it’s unfair. They can’t expect competitive bidders to reveal how they arrived at their price. Contractors proved they were market value by competitively bidding. Now they’ll prove their savvy by providing breakouts intended to diminish the appearance of profit. It’s simply a story that amounts to their total, that gives the client what they asked for without giving them anything worth taking away.

apathy

“Competition was fierce but you’ll see everything’s still in order…”

Clients should be encouraged hold up their end of the deal and work with, rather than against, the winning bidder. In a typical hard-bid, the final budget is the market-price of the project. There’s more than just labor and material going into that market price. Project risk from schedule, site logistics, seasonal workloads, worker shortages, design shortfalls, working conditions, labor disputes, insurance and bonding requirements, etc. The client may not realize that their project would be much cheaper at a different time of year, or that their project requires specialty products that are in short supply.

Very often GC’s will try to accommodate budget over-runs with Value Engineering which sadly translates to “substitute cheaper materials and cut scope”. From the client’s perspective, this is an extremely frustrating solution. They’ve paid to develop the design of their project vision. Along the way they’ve become attached to the look and feel of the design. Amputation and substitution are hardly welcome solutions to their budget problems. Presenting options to change things like; timing, site logistics, bonding requirements and design shortfalls could potentially solve their budget problem without affecting their vision of the project.

architect

“My architect is confident there are no design shortfalls…”

At a minimum, providing a sense of how these issues have calculable monetary impact on their project shows that you’re not taking advantage of them.

In my experience most GC’s resort to metaphorical hand-waving when it comes to costs outside of material and labor. Get solid on what’s going into your total and you’ll have a distinct advantage making your case to a client. There is no substitute for knowing what you’re talking about.   When clients understand the risk their project presents to a GC, they regard bids with greater circumspection.

The best jobs for clients and contractors are those where everybody wins. Winning bids profitably demands that you stay committed to being the best in your field. Get in there and make your victory count. Because losing what you’ve won is being the best, undone.

 

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© Anton Takken 2015 all rights reserved