The Secret to Getting Great Bids

Uncategorized Jul 22, 2020
 

A lot of general contractors are lazy. They use the same sub-contractors over and over. It's too much work to shop around every time they have a new build. This is how good-ole-boy clubs are created. They are created by people who hire the same people over and over. Breaking into that club can be hard. Many general contractors operate inside an informal club. This is the hard core truth. As owner builders, you cannot do this. You need to know the market better than this, which means you need to know the price and quality available in the market in order to make an informed decision. 

There are three things owner builders need to do to get great bids. The first is networking. As a general contractor, I have a website and a presence on a lot of social media. Enter Kelsch Construction on any search engine and you can see me at the top. I am also involved in a lot of business networks locally. The benefit is I have a big footprint and a lot of sub-contractors in many trades are constantly knocking on my door to bid my jobs. I get about three calls a week. I received two this morning while writing this post.

As a personal goal, I try to have at least three deep on my bench for every sub-contractor. I want three framers to call on, three excavators, three plumbers and so on. When times are good, I want three. When building is slow, I want five. 

Owner builders do not have this luxury. So they need to create it. The first thing you can do is put a sign up at the job site and indicate a future build that will take place. On that sign put an email where sub-contractors can request a set of PDF plans to bid from and send you an estimate. Make yourself be accessible, widen your footprint. 

Second, know where to look for sub-contractors. Not all sub-contractors have a website and many are not found online. They are found by word of mouth or they are found on a separate organization's list. The following organizations are great resources. 

  • Local home builders associations 
  • Local or regional chamber's of commerce
  • Job boards at the local ACE or other hardware store
  • Lumber yards often have a list of many sub-contractors
  • Supply houses
  • Networking organizations like BNI, Rotary and others
  • Phone books

Third, the best place to find good sub-contractors is at active job sites. Many times I have walked on job sites to talk with sub-contractors. They are generally pleasant and open. Best of all I can see their work. I ask for their info and if I can send architectural and engineered plans to bid. Face-to-face meeting is always good because it can tell you if they are too busy or hungry for more work.

Now I have two warnings:

Warning #1, you will not find a lot of options online using search engines. Most sub-contractors are buried in huge data aggregator sites like Houzz.com and Angieslist.com. These sites do not make it easy to find trusted sub-contractors and their recommendations are not accurate. Why? Because most of the people who hire on these sites are hiring for remodels or service or repair needs, not for new construction. Do not hire a plumber who is mostly a service tech plumber. They are not experienced in new construction and they do not know how to bid it. Sub-contractors in the service industry charge much higher than for new builds. Do not ask them to bid new construction. 

Warning #2, know your market piece rate.  If you are in a high construction area, look into getting bids from other markets where the piece rate is lower. For example.. Last summer I was building in Park City, Utah. A very high cost area per square foot. My framing costs were over $26.00 a square foot. I am now building in the south west corner of Utah where my framing costs are about $8.00 a sq foot. That's a $45,000 difference in markets, a lot of money. Know your market piece rate and look outside that market if you need. Sometimes is makes sense to bring in labor from one market into another market. Builders do it all the time to save on costs. 

 

 

By Keith R Kelsch
How to Build Your Own Home

Kelsch Construction.com 

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