Approach to project bids as low bidder 1

[rockman7892]

I work for a larger company that provides EPC project services. Compete on a lot of project opportunities where the low bid usually wins and we typically find ourselves up against smaller competition with a low bid approach. On a lot of these projects there is not always a well detailed scope so a lot of times its left to bidders to spell out their approach or what their providing.

The issue I've seen in the past is that some of these low bidders sometimes will turn a blind eye to an engineering issue or required product offering in an effort to be a lower bidder. I suspect that these winning lower bidders in a lot of cases will hit the customer with change orders to make up for bid ommissions after winding project. Our company sometimes takes a more thorough approach to addressing known engineering issues on the front end an providing equipment that we know will meet the application.

My question here is seeking feedback from others for taking a low bid approach and omitting certain engineering and product offerings (even know you know they may be needed)with the proposal in absence of a good spec? Do you typically omit or overlook some items to keep bid low realizing that you can leverage change orders for these if the project is awarded? Are there certain types of project contracts that would put the responsibility on the bidder and prevent them from submitting such change orders should they be successful with the bid award?

Thanks for any feedback that anyone has.

 

[1503-44]

The biggest problem with awarding bidders any job is figuring out if they bid on the required scope of work. First do that and make it as clear as possible that you have included everything that is required, specifically listing line by line what that was and any limitations, if any, you care to make on those items. If you know what you are doing, you won't have to second guess what others are doing. After the best bids are selected, there will usually be a Q&A session which will expose low bids for what they are and forthright bidders will survive to final bid award stage. If for some reason you do not survive to that stage, learn from the experience and try to reduce costs for the next bidding opportunity. Nobody wins all their bids.

In my experience the only way to be truely successful is to make sure you fully understand the scope and include everything in that scope in your bid. Never exclude items in an attempt to be the low bidder. Most clients want what they want to be successfully built above all else, as you should as well. Those clients that put that aside trying to get a better price will soon learn from their mistakes. Personally I'd rather not be part of that process. The hardest part of bidding work is knowing with whom you want to work with and whom you don't. If you lowball, that will eventually be everyone, but it will be them telling you that.

 

[alchemon]

The easiest solution here is to provide a "bid compliant" proposal and then a "additional considerations" proposal. Give them the "apples to apples" bid on what they have asked for, then line items for what you think is missing from their scope. Aka you said you wanted widget A which is $Xk, but widget B can be provided for $Xk in addition to the base proposal. Kind of like car shopping, give them the base model price and then a list for the options.

It is only unethical to intentionally low bid a job on change order if doing so violates a law, the safety of the public, or known scope (aka the needs of the project). If you price in "unknown scope" (aka what they might decide that they want halfway through) then you won't win many bids.

Generally, I would bid on what the client has asked for, and often times they don't know what they need. So it is your job to tell them what they need, and then you can tell them what they might want also if they're willing to add X to the price. If it isn't in the scope, it is a change order. That's how bidding works. You or they can define the scope, but you do need to be clear.