Dilemma: To bid or not to bid

     Every time I have a construction job that needs to be done, I go through the same mental turmoil Ė should I get a firm bid or should I pay "time and material"?
     Iíve never quite understood the fairness of bids. As I see it, there are three possibilities when working on a bid:

I lose and the contractor wins

The contractor loses and I win

No one loses because for the first time in the history of mankind the contractor estimated exactly what the job cost him to do

    Option No. 3 is another way of saying "time and material." The customer pays the contractor a set hourly wage for all his workers, including a surcharge for overhead (workmenís compensation, administrative costs, etc.) and profit. Materials are included in the weekly statement.
    Now thatís fair. It is what it is; it costs what it costs. Iíve done it both ways, and while both bids and time and materials make me uncomfortable for the sole reason that I am spending a lot of money, I generally prefer time and materials. At least I know Iím getting what I paid for.
    I realize Iím giving up the "win." But me winning means the contractor loses. I generally like contractors. They work hard performing a dirty and difficult job. Some of them even have families. A house, maybe a kid or two. One or two of them might even have a heart.
    I get no overwhelming joy watching them lose their shirt at the end of a job. Maybe a slight twinge of elation, but no overwhelming joy.
    And besides, I get tired of participating in conversations like this when a contractor knows he underbid:

Me: Would you mind moving that window one foot to the left? It will make a world of difference.
Contractor: Not a problem.
Me (two weeks later) $4,652.42 to move one stinking window one foot!
Contractor: Youíd be surprised how much work was involved. I had to pull men off other work, we had to reframe the headers, brace the joists, patch the sliders, search for Shangri-La, give birth to quintuplets, blah, blah, blah. These change orders can be expensive.
    Worse yet is when the contractor wins. Theyíre so happy you want to smack them right in the face. You know theyíve won and won big when they start doing an extra something for nothing.
    "Well, the jobís all done," theyíll say. "And by the way, I had one of my men sweep your sidewalks, clean your gutters and drop your kids off at school. Thought you might appreciate it, because we sure appreciate your business."
    "You greedy, conniving bloodsucker," I generally respond. "How much extra profit did you make off of me?"
    Thatís when they walk away, laughing merrily off to the contractorís hangout, where over a few beers they tell stories about their latest pigeons.
    Maybe Iím exaggerating a tad. Bids can work out fine. And it certainly eases the stress factor to know exactly how much the job will cost before you start.
   One option I have used in the past is to get a bid from a contractor that he guarantees he will not exceed, but then still have him work on time and materials. If he comes in under the maximum price, the savings is yours.
    Most contractors have no problem with this program. Thatís because for some divine reason the time and materials cost always comes to 99.99 percent of the maximum guaranteed price.
    "Hard to believe we were so close," the contractor will say when his $25,474 maximum price came in with an actual price of $25,472.50. "What are you going to do with the $1.50 you saved?"
     So I generally donít bother with bids of any sort. There are times, though, when they become absolutely necessary. One is when a contractor would be working without owner supervision. Another would be when you have no choice.
    For example, in January, Iím starting a large remodel-expansion of one of my retail stores. The project is of such size that it requires bank financing. And banks arenít really interested who wins or who loses on a bid. They only want to know the bottom line.
    The words "approximately" and "I would guess" donít go over well with bankers. I should know; Iíve tried.
    So Iím getting bids. And as the grossly inflated numbers start to roll in, itís clear that someone will once again win, and itís not likely to be me.

 

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