For many construction professionals, subcontracted work can make up a large part of the yearly revenue. That's fine by itself, but sometimes selling your services to general contractors can prove elusive and even a little frustrating.
After all, you punctually respond to their request for bid, you're relatively sure your pricing is competitive for your market, and you feel confident you have plenty of experienced manpower and equipment to tackle their jobs. Yet for some reason, you just don't seem to get the work come award time.
Of course, not getting the work is bad enough, but when you factor in all the resources and office time eaten up during the estimating process, the return on investment pales even further - and you can't afford to spin your wheels. Running a contracting firm is tough enough without wasting precious hours preparing quotes that don't deliver the necessary work. Yet if you don't deliver estimates, you're guaranteed not to get the work. So what do you do?
Searching For SolutionsThe key to obtaining work is not so much the technical aspects of bidding and contracting as it is more nontechnical areas of professionalism, reliability and relationship. As a subcontractor, if you can combine a program of committed client networking with an understanding of the forces motivating the GC (who owns the potential to bring you repeat work), you can greatly enhance your chances for the next job. The networking part you will need to do yourself. As far as understanding where the GC is coming from, let's take a look at a few tricks you can use to solidify your relationship:
Be Clear & CompetitiveDespite what you may have heard or think, most GCs do not base the decision whether to choose a subcontractor on low price alone. The GC's philosophy goes something like this: In most cases, we generate far more revenue through the action of building than we do dissecting one-quarter percent and one-half percent differences in sub quotations that are normally apples and oranges anyway.
Always, as we wade through our daily pile of subcontractor and supplier quotes, we hope in the back of our minds that the proposal we're examining right now is the one that's clear, complete and competitive (not dirty-low, just competitive) enough to meet the demands of the project, allowing us to move on to our next course of more profitable endeavors.
This isn't just rhetoric. I'm a GC and many times over the years I've chosen to go with the second- or third-highest number simply because I felt more trusting and confident in the company's ability to get the job done. When weighing an $80,000 subcontract line-item, for example, $1,000-$2,000 is peanuts compared to the money lost to nonperformance or correction of faulty work. Remember, too, that it's not just the cost of the fix that we worry about. There's also the corresponding drop in the GC's credibility that almost always seems to spawn other "concerns" from the project owner as the job goes along.
Hello, My Name Is . . .If you're approaching a GC for the first time, work up a one-page introduction (or re-introduction if it's been awhile) letter telling a little about your company. Don't make it too long and complex or it won't get read. Include your current address, phone/fax numbers, principals, key people, e-mail address and the services you offer.
Be specific about what you do. If, besides the conventional norm for your trade, you offer other services (such as dewatering, shoring, etc.), list them in your letter. Don't assume the GC knows everything about you and your company. That extra bit of information may get you the job.
Follow ThroughFollow up with a phone call or a visit to the prospect. Most GC estimators keep a file - computerized or written - of subcontractors and suppliers broken down by trade and often in CSI (Construction Specification Institute) format. When a job comes up for bid, the estimator uses that file to send out bid invitations via postcards or bidfaxes to those subs and suppliers that are affected by the bid.
When making your call, a good opening line is: "It's been a while since we talked. I just wanted to see if you received my letter and updated information for your sub-contractor list." Then, of course, add something new to say. The estimator will almost never just take the info and hang up (unless he's on a bid deadline, in which case you don't want to take up his time. Tell him you'll catch up later). Conversation normally ensues on this follow-up call, and that gives you a chance to feel him out about potential work opportunities.
All In The NumbersOffer to give budget numbers. GCs work up budgets for clients all the time. Having your budget number used up front increases the odds they'll come back to you come hard bid time for the simple reason of not having to repeat a lot of information.
One-Up The CompetitionSubscribe to a reporting service like F.W. Dodge or CMD (Construction Market Data). These reports tell of upcoming construction projects that will be up for bid in your area. The bidding GCs normally are listed and details about the project are included. Check this again come bid time, names will have been added. These reports also offer information on contract awards, work in planning stages and negotiated work where subcontractor proposals will be requested by one awarded GC.
Armed with information from the reports, you'll be more knowledgeable and professional when talking with the GC. You'll know what's out there to bid, who's bidding, and what GCs are getting all the work.
The Cold-CallMost subcontractors and suppliers (actually, most people in general) hate this one, but get out there and practice the age-old art of the "cold-call." This, of course, is where you walk in unannounced just to let them know you're around. Yes, this can be difficult to do, but never underestimate the power of social skill. I've seen it work too many times. Anyone, no matter how staunch and business-like they may appear, wants to work with someone whom they consider a friend. It's simple human nature.
Right Place, Right TimeA little sidebar to the cold-call advice above is that you may also pick up work just by being there. Here's how it works: Often, in the GC's hectic daily grind, the importance of getting a job done right now far outweighs any minor advantages gained through hard-bidding. You would be surprised how often (and how much) work I give away simply because the person was standing in front of me at the right time. Now, yes - I'm probably going to ask for some unit or T&M pricing, so be armed.
The Proposal - Part II can testify that when reviewing and analyzing sub-contractor proposals there is a marked difference between the best and the worst in the bunch. Some are professional and complete. Some are incomprehendable and illegible. It seems fundamental, but always be sure to submit clear, whole (all pricing, including alternates) and readable bid proposals. Submit on professional letterhead and always include a phone number and contact person in case last-minute questions pop up on bid day, which they almost always do.
The Proposal - Part IISimply slapping a single, base bid number you've estimated from the plans and specifications on a page and faxing it around simply won't do. Today, virtually all GC bid proposals (especially larger or commercial jobs) require alternate, breakout or unit pricing to be submitted along with the GC's base bid.
If not submitted, the GC may risk being disqualified. Here's your hook: The GC needs your numbers to complete this requirement. Whenever possible, get a copy of the actual bid sheet (in the spec book) that lists all required bid pricing, and then go out of your way to offer assistance to the GC. It's just one more thing that can separate you from the pack.