In the good old days...before the fall of 2008...most contractors were working with either cost-plus or hard-bid contracts. You did your homework, calculated your costs, overhead, profit, and you bid the job. You were either high bidder, low bidder or maybe in the middle of the bidding field. The chips fell where they would and you moved forward as the successful bidder or went on to bid another job.
Fast-forward almost four years and you'll find clients more wary, loans harder to get and fewer projects to bid. To add to the conundrum, competitors are hungrier, and costs and labor haven't gone down.
So, what do we do? We work smarter and become more client-centric. We work with clients early in the process, becoming part of the design/build team even if we only design or build. The client, the designer or architect and you should work together to design and build within a budget without all the jockeying for position with other contractors. Remember, you are a resource and have value.
Why does this work?
- As part of the team, you can make suggestions early on that will positively impact the budget.
- It gives the client the advantage of seeing the subcontractor bids. Open-book bidding builds trust and puts everyone on the same page.
- Fewer change orders during the project mean less frustration for everyone, and, savings for the client.
- At the end of the day, the checks and balances in the negotiated general contractor project usually will save money, bring the project together at or under budget, and will be completed more quickly.
Educating clients, architects and designers will help you become part of the team. So step out and consider this change in the way you work. Don't settle for submitting the high, middle or low bid on your next project. Instead, be the contractor from the beginning and help your client navigate the process. And once again, be the resource.