Sprinkler Age A Publication of the American Fire Sprinkler Association
Success = Details + Hard Work
One of most important things a sprinkler contractor must do is to learn how to “win a bid.” In the sprinkler world, you must learn how to keep feeding the beast in order to stay in business and that means you have to get really good at winning bids.
To be really good at winning a bid, you must work very hard at bidding and learn how to be really smart in handling the bid process. In winning the bid, everyone must keep in mind that anyone can be stupid and offer a low bid, but in order to make a profit you must have a rock solid bid. After all, making money is required for you to have a healthy business. Winning a bid is a lengthy process and I will describe the steps that must be taken.
Look for the right bid opportunities for you and your company. They should be the type and size job that you have experience in and that you feel comfortable that your company can handle. It would be crazy to bid a $3,000,000 job if you only employ six fitters. It would be crazy to try to bid a nuclear power plant if you have no experience in that type of job. Don’t get crazy and take unnecessary risks in your bidding.
Obtain a full set of plans and specifications and review them thoroughly. Make detailed notes on what is required in your scope of work.
Do a simple layout and calculation to determine the basic design and pipe sizes.
Look for ways to outsmart your competition in the design of the system.
Vet your ideas to the architect and engineer, owner and insurance company if need be, to assure that your design will be accepted. You do not want to take the risk of changing the design for the original plans and specifications if you are going to be held to that original requirement.
Do a thorough pick off of materials for the bid.
Consider all site conditions and go to the jobsite if it is an existing property. Know everything you can about the conditions on the site so you can put together a knowledgeable bid.
Develop a plan to design the project and develop the hours estimated to design the job. Review these hours with your design manager or design staff.
Develop a plan for the installation and develop the hours estimated to install the job. Think about the site conditions as there are 100 things that could impact your labor. Review your labor estimate with your manager of construction staff.
Review the schedule for the project and think about material and labor escalations. If the job is a two-year job, you will have escalations on materials you purchase for the job and you may have several raise cycles where your employee’s salary is increased. You must add escalation to your bid.
Double check the site conditions to think about any impact to delivery of material, storage of material or installation of material. Simple requirements like having the laydown area a half mile from the building or having to work off dirt, not concrete, floors will have a huge impact to you bid.
Look at the special conditions of the specifications to see if you have any impacts to consider.
Understand the insurance requirements of the job. If the conditions require a $5 million umbrella and you only have $1 million, it could be costly to have to provide it and not be paid for it.
Understand the bonding requirements on the job as if you have to provide one. Will you have to pay for it or will it be an extra?
Develop a complete and detailed estimate.
Know what overhead and profit you want on this project and know where your bottom number is.
Develop a complete and detailed proposal detailing what you are including in your bid and what you are excluding.
Understand the players who you are bidding, too. It is very different bidding directly to an owner versus bidding to 10 general contractors. Not every general contractor is the same and some are very difficult to work with. You need to take this into consideration when bidding the job.
Try to find out who your sprinkler competition is on the bid as it will have you make a more informed bidder on bid day.
Review with all the owner’s general contractors prior to the bid what your scope of the bid will be and what your exclusions will be. Show them how knowledgeable of the job you are.
On bid day hand deliver or call in your bid; never email it or fax it. Confirm your bid by email, fax or regular mail after the bid. When you deliver or call in your bid, make sure that you explain in detail what you are providing. Many contractors just want a price, but do not fall into that trap if there are unusual things about the bid. You want to make sure early on that you educate the people taking the bid of the unusual items so they make sure your competitors have those items covered.
Follow up immediately on the bid to see who was the winning general contractor.
Follow up immediately with the owner or winning general contractor to see where you stand. Many sprinkler contractors do not do a good job on follow up. Weeks or months later is too late. You may not be the low bidder on bid day, but you can still end up with the job if you are smart and you take immediate actions. Be aggressive in the follow up.
Get your face in front of the owner or winning general contractor as soon as you can. Your action can make a difference. When you see the owner or winning general contractor, do the following:
- Explain your bid in detail.
- Bring out unusual items that your competition may not have covered.
- Tell them your plan to get the job completed.
- Explain the team you have in place to do the job.
- Let them know your experience in the industry and on this type of job.
- Give them reference letters from others where you have successfully completed this type of job.
- Sell yourself.
- Sell your company.
- Sell this owner of general contractor on your ability to do this job and be his best candidate to perform the sprinkler work on this job.
I know that things have changed in the contracting world, and I have to tell you that I am “old school” in having face-to-face personal relationships. Many younger salespeople think this is unnecessary. My 46 years of experience tell me differently. While things have changed, we still deal with people every day to obtain a winning bid. The staff who faxes their bid in and never follows up on their bid, waiting for the contract to come rolling in the mail will lose bidding against me. The old saying “You snooze, you lose” will be in place and I will be aggressive, get in front of the owner or general contractor, and sell myself and my company and walk out the door with a signed contract or a signed letter of intent before you ever knew I was there.
All of these actions are important to win the bid.
I cannot tell you how many times I was second, third or even fourth bidder and I received the contract on the job due to my actions. Often I was not the low bidder but was awarded the job. Many of my competitors were too lazy to do what I did. Many of them wanted to just sit back in their office and wait for the contract to come in the mail. That is not the way to be successful.
As hard as it is to “win the bid,” now you are awarded the job. The real hard part starts now, to perform the installation of the project as per your plan and to bring the job in under your estimated cost. By performing properly on the job and impressing the owner or general contractor, it will be easier next time to “win the bid.” It is now time to start all over again to “win another bid” as you have to feed the beast to stay in business.
ABOUT THE AUTHOR: George Wagner has served the fire sprinkler industry for over 45 years, through Worsham Sprinkler Company, Wagner Consulting Services, and currently as executive director of AFSA’s Virginia Chapter. He holds a NICET Level III in Automatic Systems Layout and numerous other certifications. He served on the national AFSA Board of Directors for five years and five AFSA committees, and currently is the project facilitator for AFSA’s Inspection, Testing & Maintenance program to develop NICET Level II Inspectors. Wagner is the 2015 recipient of AFSA’s highest honor, the Henry S. Parmelee Award.
