How many of your general contractor customers give you that enviable “last look” on hard bid projects? Wouldn’t that be better than simply hearing, “Sorry, you were a close second or third”?
Let’s look at some of your options for keeping the door open in order to sit down and negotiate a bid:
1. At the top of this list is submitting your “Value Engineering 20” cost-saving options and ideas with your bid proposal. Everyone is looking for a better way to save time and money (refer to my February 2010 column, “Add 20 Percent To Your Bottom Line With Value Engineering”).
2. Keeping the door open with contractors that you are presently working for is also crucial. Exert all of your efforts to becoming an ongoing member of their teams.
The Good Samaritan deeds (helping others in need) that we discussed in last month’s column (“Good Samaritan: Good For Your Business,” April 2010) could easily open more doors with the other trades and with other prime contractors working with them.
This opportunity is always open with the plumbing, mechanical, electrical, fire sprinkler and irrigation trades. You can sub work from them or to them as the need arises.
Another option is to form a joint venture team to bid future projects. This creates a worthwhile opportunity to bid on bigger projects and complement each other’s capacity.
When you are working with out-of-town subcontractors, there is always a possibility to negotiate their punch-list work. In addition to relieving the subcontractor of this costly and frustrating obligation, you open the door to future work with that owner.
In addition, your value engineering could produce a better and more efficient system for the project owner, which would lead you to more of his construction work, as well as service and maintenance work.
3. Avoid costly, relationship-damaging confrontations regarding extras, change orders or liquidated damages. Review your foreman’s daily log every week to make certain any changes involving extra time or money are documented, along with the names of whomever authorized or approved the change. And get signed work orders whenever possible.
Submit any financial changes each month with your draw. If you did the extra work this month, you should be paid next month. Do not wait until the end of the project when no one remembers what you did or the person you worked with is no longer available. Keep in mind, the general contractor must get authorization from his customer to settle your claim.
Horsetrade as much of the extra work with your contractor and with the other trades, but make sure to document this in your foreman’s daily log to eliminate future misunderstandings or backcharges.
If a disagreement should occur, you need to accumulate all the pertinent data and meet with your client to amicably negotiate and resolve your differences. I’m certain you have heard some say, “I’m going to get every last penny.” Unfortunately, that attitude will assure that you will not get another job with that contractor.
Negotiation requires compromise by both parties to arrive at a mutual agreement. You need to be fair with your prices to reinforce your opportunity for future work. Eliminate any possibility of legal action because that will definitely shut the door on forthcoming opportunities
Show Your AppreciationBuilding an ongoing open-door relationship also requires an ongoing show of sincere appreciation. Remember the saying, “Why would anyone continue doing something nice that wasn’t appreciated?”
Let’s look at some of the gestures that subcontractors can use to show appreciation to their general contractors:
1. Take an interest in their recreational activities. This could include all types of sports and sporting events, as well as social entertainment. Informal discussions with your contractor or any of the company’s employees will generally reveal his personal entertainment and recreational preferences.
Golfing provides a first-class social environment and convenient time for sharing common interests. However, you should avoid discussing business situations. My advice when you are socializing with family or friends is leave your tool belt at work.
Hunting and fishing are a top priority for many construction personnel. We work in, live in and enjoy the great outdoors. Both activities provide an opportunity to enjoy everything Mother Nature has to offer. And something is always in season. We have big-game, small-game and archery hunting. We have inland stream fishing, lake fishing and ocean fishing on party boats, as well as guided tours and private vessels of all sizes.
Most construction personnel are sports enthusiasts. You can invite your contractor to any sports event or accompany him to his favorite event - especially one in which a son or daughter is playing.
You can also give him tickets to a sporting event. Even if he doesn’t attend, he would appreciate the pleasure of giving them to an employee, friend or family member.
Also, depending on where you live, there could be a variety of shows, concerts and other live performances available that your contractor might enjoy.
2. You can express your appreciation of your client and his staff by having food baskets delivered to the office. Also, when you visit your client’s office, the staff would welcome a package of donuts, bagels, baked goods or fruit.
In addition, you might offer calendars, pens, ball caps or pocket knives personalized with your company name. Many subs send a box of high-quality candy, chocolates and cookies at Christmas and other holidays.
3. When the need arises, you should provide below-cost service, repairs, maintenance and remodeling at the contractor’s home, office, shop or warehouse.
All of these ideas will keep the door open for that invaluable last look in the bidding process and your opportunity to negotiate.