We have a local county commissioner who insists on dickering on EVERYTHING. It is downright embarrassing to watch. The word has gotten around to nearly every category of vendor. So they all start out too high, no matter what it is. If they make an honest offer, he absolutely will not accept it. He MUST dicker.
I'll also observe that there are clients from certain categories for whom haggling over price is a given. In my experience, these are:
- people with a background in retail sales, and
- people with a background in some culture that has haggling as a norm (South and East Asia come to mind) and for whom the assumption was that the MSRP you quoted was just the starting price.
I'd think that someone who is an astute dealer in new and used surveys would identify both of the above categories in advance of quoting the MSRP so that it can be bumped up by 10% - 20% to leave room for the "discount".
MightyMoe, post: 423926, member: 700 wrote: I would have spent that during the bidding process.
Then you should have bid amother $2100 higher.
Many years ago, in a different time and place, I dealt with US ARMY civilian staff workers. They needed something done and they wanted us to do it. We started to put together a proposal but kept calling them for clarification on certain little details. Finally, the main guy says to me, "If you can do it for less than $300,000, it's yours." I sort of tripled our estimate and whipped out a proposal for $298,780 (or something like that). The Director of Engineering (two steps up from me) was extremely hesitant about letting me put out that proposal because it was several times larger than any other similar proposal we had ever sent out. I finally broke down and told him about the "clue". He got a huge grin on his face and said, "Do it! " It took a looooooooooong time but we somehow managed to spend every last penny we received for performing that project.
Holy Cow, post: 423994, member: 50 wrote: Many years ago, in a different time and place, I dealt with US ARMY civilian staff workers. They needed something done and they wanted us to do it. We started to put together a proposal but kept calling them for clarification on certain little details. Finally, the main guy says to me, "If you can do it for less than $300,000, it's yours."
I trust that since then you've learned that fees that are to be paid with OPM are in a different category than those for which someone will actually be writing a check from their account.
I believe that paden has previously indicated that the key to his former success was in securing various check writing mechanisms set up to pay in OPM dollars.
Holy Cow, post: 423994, member: 50 wrote: Many years ago, in a different time and place, I dealt with US ARMY civilian staff workers. They needed something done and they wanted us to do it. We started to put together a proposal but kept calling them for clarification on certain little details. Finally, the main guy says to me, "If you can do it for less than $300,000, it's yours." I sort of tripled our estimate and whipped out a proposal for $298,780 (or something like that). The Director of Engineering (two steps up from me) was extremely hesitant about letting me put out that proposal because it was several times larger than any other similar proposal we had ever sent out. I finally broke down and told him about the "clue". He got a huge grin on his face and said, "Do it! " It took a looooooooooong time but we somehow managed to spend every last penny we received for performing that project.
Government agencies typically have cutoff amounts. Spending authority is delegated up to a certain amount.
For us contracting under $5k is much simpler. So if your backhoe needs some repair you call the repair shop and ask if they can do it, they know the cutoff, they might say sure we can do that for 4950.
All I know is that I have yet to write a check for $300,000 out of any of my checking accounts. (We have four active accounts at the moment.) I have written some that I thought were REALLY big at the time. The first time I wrote one for over $50,000 it about took my breath away.
I've started talking to clients about "budget" instead of giving them a price.
I tell them that my fee will probably be one of the lowest that they will have to pay to anyone except the bug inspector.
We talk about the realtor, banker, bug inspector, insurance and other home owner expenses.
Then I explain what I do and how much to add to their budget.
After all that, I assure them that I will interfere with anyone's schedule or their work and everything will fall within my budget unless one of the other people involved starts telling me how to do my job and won't leave me alone.
A Harris, post: 424019, member: 81 wrote: I assure them that I will interfere with anyone's schedule or their work ...
I've never thought of that, but may just try it if it works as well as you say in Northeast Texas. :>
aliquot, post: 423992, member: 2486 wrote: Then you should have bid amother $2100 higher.
That would have been a good move, throwing away my time, kinda like putting cash on my lawn and b
aliquot, post: 423992, member: 2486 wrote: Then you should have bid amother $2100 higher.
That makes sense, just throwing away time for nothing.
aliquot, post: 423992, member: 2486 wrote: Then you should have bid amother $2100 higher.
Of course thats one way to look at it, losing the work you want to do and spending time in the process.
People all look at income and profit/loss statements in many different ways. I use to work for an asphalt producer/ construction company that did large highway work. We'd put a bid together for say 7.5 million, with 1.275 million figured in as profit (we use to call it "dream numbers" ). After a 700 day contract with all the feathers and dust on the floor we figured we had made 900K as "profit" instead of the "dream" number of 1.27 mil. The owners would stomp around and bitch for the next year and swear up and down they "lost" 375K on the project.
But then again nobody has ever confused paving contractors with rocket surgeons either...;)
Scott Ellis, post: 423938, member: 7154 wrote: I know you lower the price of what you think the job is worth to get the job, so you it would not go to bid, which you may or may not have been awarded the job. I am just wondering what you would have spend $2,100 on after you submitted the bid since you said it would cost you that during the bidding process.
Scott,
Lets say I'm on a IDIQ contract for the local transit agency. I know that maximum contract that can be assigned under that list is $50K without the agency needing to go through the full proposal process. By doing a $52K job for $49,999 I win on several fronts. First I don't have to go through the formal proposal process which could easily eat up $2K in added time with no guarantee of success. Additionally I get to make points with a long term client which will benefit me later down the road.
As for the original post, I will negotiate with scope and price with one off clients. With a long term or potential long term client, I will at my discretion negotiate a lower fee with out reduction is scope if I see a future benefit for me.
John Putnam, post: 424097, member: 1188 wrote: Scott,
Lets say I'm on a IDIQ contract for the local transit agency. I know that maximum contract that can be assigned under that list is $50K without the agency needing to go through the full proposal process. By doing a $52K job for $49,999 I win on several fronts. First I don't have to go through the formal proposal process which could easily eat up $2K in added time with no guarantee of success. Additionally I get to make points with a long term client which will benefit me later down the road.As for the original post, I will negotiate with scope and price with one off clients. With a long term or potential long term client, I will at my discretion negotiate a lower fee with out reduction is scope if I see a future benefit for me.
negotiating fees and prices with good clients is way better than bidding jobs you don't get anyway, proposal costs can eat up any profit, often when you win a bid job you only get it by a $1000 or so and the time bidding needs to be included, bidding and not getting is lost money.
Preparing a detailed proposal for a bid is absolutely a huge cost that is a total loss if you don't get the work. I agree with you 100%.
I will confess.
Once upon a time.
I knew I had a price shopper. He'd call me. Then always use another surveyor.
So, i gave a low ball bid. Knowing it was not my job.
I heard later that the other surveyor could not pay his help, on that project....
Must be a sign. When things are good, the only dickering is about the completion date.
John Putnam, post: 424097, member: 1188 wrote: Scott,
Lets say I'm on a IDIQ contract for the local transit agency. I know that maximum contract that can be assigned under that list is $50K without the agency needing to go through the full proposal process. By doing a $52K job for $49,999 I win on several fronts. First I don't have to go through the formal proposal process which could easily eat up $2K in added time with no guarantee of success. Additionally I get to make points with a long term client which will benefit me later down the road.As for the original post, I will negotiate with scope and price with one off clients. With a long term or potential long term client, I will at my discretion negotiate a lower fee with out reduction is scope if I see a future benefit for me.
No what you are doing is leaving 2K on the table, and letting the 50K maximum contract set the cost of the survey. You may or may not be making points with the client, but one thing for sure you are doing is letting them know you wont be going over the 50K mark. On the next project of the same scope they will also expect it to be under 50K. Most Surveyors are terrible business men, they would rather lower their price then have a client upset, or risk making no profit on a job so no one else will get the job. Let another company get the job, while they are busy doing that job, you can work on another job, there is more than enough survey work to go away, there is no need to under bid jobs. I still do not see where the bidding process will cost 2K. If we all will bid on what we think the job is worth, and not we have to stay under this amount to get the job it will help us to make some real profit.
I get it, it helps to say well it would cost me this much if it goes to bid, so let me lower my price by that, now I can sleep at night because I made up an excuse on why I gave away 2K, and I won't be needed that money anyways until I retire or I need to buy new equipment or give my crew a raise.
Choosing to eat 3% on a decent sized contract for a repeat Client in order to keep it out of the hard bid realm doesn't seem like bad business practice to me. Good, fast paying repeat Clients are worth their weight in gold IMHO.
Cameron Watson PLS, post: 424119, member: 11407 wrote: Choosing to eat 3% on a decent sized contract for a repeat Client in order to keep it out of the hard bid realm doesn't seem like bad business practice to me. Good, fast paying repeat Clients are worth their weight in gold IMHO.
And 50,000>0, while -2000<0. Sometimes it's amazing how surveyors can be so bad at simple math.;)