“You’ll have to sharpen your pencil.”
How often have you heard that during a construction contract negotiation? It’s standard procedure for many price negotiations, at least for those who have no real idea where to start, or a clear focus on what they want to achieve.
The contractor’s response is too often to look at the profit line for a price reduction, but that is a vicious circle to enter. Even if profit can be reduced, the contractor will probably just be asked to look again, and again, until the breaking point is reached. And that’s when the contract will be awarded, at a bare minimum profit where there’s no room for error.
- If you’re a contractor, do you really want a contract where absolutely nothing can go wrong without it causing you to lose money?
- If you’re an owner, do you want a vendor trying to make up lost profit by cutting corners on your project?
Because of location, schedule limitations, and other unique factors, some owners might pay a premium for their work. Under normal circumstances the market may be more competitive, but that doesn’t make it free from the bid errors, miscalculations, and misunderstandings of the owner’s intent that needlessly inflate most construction prices. Most subcontractors, and their suppliers as well, aren’t aware of their pricing mistakes when their bids are submitted. They don’t usually have the time to look for them, or even know where to look when they do.
McKenzie-Douglass has the time and, most importantly, we know where to look. We’ll find the mistakes that inflated the bid price, eliminate them, and return money that would otherwise be wasted to its rightful owner; all without asking anyone to reduce their fair profit by one cent.
Every bid error will eventually be found, but by the nameless vendor who made the mistake, who you’ve never met, and they’ll keep the windfall for themselves. Wouldn’t you rather find that mistake now and keep the windfall for yourself?