Whether you are a general contractor or a subcontractor you are faced with the problem of looking at competing quotes for labor, material, equipment or a combination of them. One of the most important operations in putting a bid together is to make sure that the information that you are depending on is apples to apples. That means the information is based on the same scope.
Since each of the companies that is bidding to you has done their own estimate, there are probably differences between the competing quotes. The most effective way to deal with this is to have a “shopping list” of all the items that you need to have in each of these quotes, that way you can see right off the bat whether the numbers that are being quoted include everything you need.
You have a concrete quote from three different contractors. The first seems high, looking at all three numbers. You review your “shopping list” and see that the first bidder includes all the items that you need. The second contractor looks like they have everything until you look at the exclusions and see that the reinforcing material needs to be supplied to them. They will install the rebar. The third bid is similar but has an exclusion for the concrete material.
After you add the reinforcing material to the second bidder and the concrete material to the third bidder you find that the highest number that you had – the first bidder is actually the lowest bidder for the scope of work.
You have three quotes from toilet accessory suppliers. One of the quotes is very, very low. In reviewing the quotes, you see that the individual quantities for the toilet accessory pieces are very different. When comparing the quantities with the other bidders and your own check estimate, you see that the low bidder does not have the full scope. The drawings have floors three to five on one floor plan drawing since they are all the same. The low bidder picked up the quantities for only one floor and not three floors.
There is a big difference in quotes for hollow metal doors and frames. All the bidders seem to have the right quantities, but one of the bidders is really low. In looking at the quotes you see that there is one subtle difference. The gauge of the metal is different. In doing a deeper investigation you see that the specifications call for a heavier gauge on some of the doors and/or frames. It appears in reviewing the quotes that the low bidder was only quoting on standard gauge metal for all the doors and frames.
You need to depend on the subcontractors and suppliers to do their own estimating. You cannot depend on them to have the entire scope of work that you need for any particular item.
It is smart business to always scope out all the major portions of a project, no matter how large or small the job.
About the author:
Lewis Finkel, F.C.P.E.
President, The Consulting Estimators Round Table (CERT)
Past National President, The American Society of Professional Estimators (ASPE)
President, Professional Construction Services, Inc.