I’ve got to ask, are you still competitively bidding the bulk of your commercial construction projects? Really, you are? Interesting….
Sure, I know there will always be commercial developers who competitively bid all their projects, but from a commercial construction cost and timeline perspective, it pays to negotiate with a designated general contractor versus requesting multiple bids on a construction project. And here’s why:
1. Negotiating with a commercial contractor allows you to split unforeseen cost savings. When you competitively bid a project your general contractor can find a subcontractor that gives a lower construction estimate than what was in the original bid and pocket the savings for themselves. When you negotiate, any cost savings your contractor may uncover are split between the two of you. Englewood Construction spells all that out up front in our best-practice pre-construction process.
2. Work starts immediately. Reviewing bids can take weeks while negotiating takes days. The sooner your commercial general contractor is on the job the better, especially during the early stages of a project like the permit process and the ordering of long-lead-time items, such as HVAC roof units, flooring and lighting.
3. Better attention. Would you rather go to a restaurant that knows exactly how you order your steak and you’re guaranteed a good meal, or drive around until you find one that’s offering an early-bird special?
4. True partnership. Projects that are competitively bid have the potential to be an adversarial relationship whereas negotiated projects have more team feeling and familiarity. You’re in this together. That’s certainly how American Girl feels about its relationship with Englewood Construction. Ahem, right guys?
5. Your contractor isn’t over his head or taking you for a ride. A good competitive bid should be within 5 percent of the other bidders. If a bid is higher or lower it’s covering more scope than you need or they’re padding their pockets. Neither of those situations is a concern in a negotiated project as together you and your contractor have collectively agreed on all costs, scope and subcontractors.
And here’s one more tip when it comes to competitive bids. Whether you’re working in office, retail, restaurant, industrial or hospitality construction, you should respect your business like your health. Would you go to the cheapest heart surgeon who was last in his class?
We’d love to hear your take on competitive bids vs. negotiating work.
Director of Operations
Tel: 847-233-9200 x712
Questions? Comments? You can reach me at firstname.lastname@example.org