There was a job we really wanted to do. It was for a long-time local client but it was out of our region. They put it out to bid and we sharpened our pencils and came up with a cost at 60k. From what I could glean there were 4 bids 100k, 58k and 30k.
Well they went with the 30k, were going to chose us but couldn't pass up the 1/2 price bid.
Job to be completed by end of 2017 if I remember correctly. I was asking the company rep how that project came out.
Still ongoing, he didn't seem happy at all.
mmm, I heard the "winner" got into financial trouble and had to be bought out.
Shame really, nice guy for sure, but dang, where do some of these numbers come from.?ÿ
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Another question is how do clients select the winning bid. The mean bid is 62k, the median is 59k. Now that's not very scientific and doesn't even look at specs, but it does shrink the ballpark.
I have no experience on either side of such processes, but I would think that 100k had some padding and 30k would result in a bankruptcy. Of course, I have the advantage of hindsight.?ÿ
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Firms that submitted the 100k and 30k price must have calculated those when the satellite constellation was experiencing poor PDOP.?ÿ Throw out the high and low outliers and the two bids in the middle seem apples-to-apples.
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We had a project a few years back that was a 4 year project, 200 million dollar construction costs.?ÿ A surveyor came in with a proposal for $240k to provide staking services for the roadway.?ÿ He had separate bids in on bridge staking for the 3 bridge contractors we had on the project.?ÿ I told the project team that that number was stupid low and don't use it.?ÿ Well, they used it and in less than 6 months that surveyor said he was out of budget, would need 1 million to finish out the year and another million to finish the job.?ÿ Needless to say, we found another surveyor to complete the scope of services for our portion of the work.?ÿ He ran out of money because he had 4 crews on the project at the start for 3 months straight.?ÿ His $240k number was for one man only and that was too low.
Many years ago I put together a proposal for a job. It was local, I had all the information cause I did all the preliminary engineering work. My bid was 30k and I only bid that cause I wanted to do the work. Well, an out of town guy bid 10k, they gave it to him. It ended up putting him out of business, the bonding company got involved, they asked me to help finish, but by then I was too busy to pull off and do a construction mess.
The job ended up very late and very over budget, I doubt it was all because of the surveyor, it was a mess from start to finish. Lower bidder often means highest price.
I am by no means a low-baller but stories like this make me grateful that I provide very detailed scopes for layout work. I make sure to included a stake count for each scope item and total mobilizations to the site. I can not understand how some companies just give a price with no real scope. They are just asking to have their asses handed to them.
As for low bids, I bid on a road project a couple of weeks ago. My $48k fee was the seconded lowest but right around the median of five. The low bid was $23K and the high was over $100k. When I talked to the contractor he said they were planning on going with the low bidder but wondered what they left off. The thing is the low bidder is not historically a low-baller and this is a prevailing wage job so this is going to hurt.