Bid Opportunities

We will be bidding the following projects in the coming days.  If you are interesting in bidding on any of these projects as a subcontractor or material vendor, please contact us.

No current bids are on our schedule for February.  Check back soon for further information.

Please note that bid dates are subject to change as the architects publish addenda on each project.  So check back often for updates!!

To be officially added to our master sub and supplier listing so that you are automatically notified when bid opportunities arise, please complete the sub and supplier pre-qualification form.  Thank you!

As a result of that bid process, Alfa Builders, Inc. was awarded the contract for construction of the facility.

Construction is slated to begin in early 2011 pending the relocation of some existing utilities.

The new Eclectic Family Health Services building will be complete in June of 2011.

The new facility will be located on Main Street in Eclectic, Alabama.

After opening all proposals, Alfa Builders was the apparent low bidder.

The board of directors for the school met on August 3rd and voted to award the contract for construction to Alfa Builders at the recommendation of the architect, Goodwyn Mills & Cawood and the schools executive committee.

Construction will begin in late August and will initially involve the relocation of the elementary school playground.

Substantial completion of the project is slated for Summer 2011.

The new Structural Training Facility and Education Center for the Alabama Department of Agriculture project should begin construction in the next 30 to 60 days pending receipt of the construction contract.

Once construction begins, the duration of the project will be roughly 3.5 months.

If your company submitted a proposal to Alfa Builders on that project, please feel free to contact Lee Waid in the estimating department to gain additional details regarding the successful suppliers and subcontractors.  If you did not submit a proposal on this project, but would like to be included on future bids, please complete the required forms on the Subs and Vendors page!!

Construction should start in late winter or early spring of 2010 and the proposed completion for the store will be late fall of 2010.

If you are a subcontractor or supplier who would be interested in quoting on various building systems on this project, please contact Lee Waid in our estimating department.

If you are a sub or supplier who has not worked with us in the past, please complete our questionnaire and attach any pertinent information about your company.  Thank you!

But in today’s economic climate, we could all benefit from some balance in regard to our hiring practices.  It might mean the difference in landing the project or seeing it go to one of your competitors!

Give Other Subcontractors and Suppliers a Chance to Price New Projects

I know in the general contracting business in Montgomery, Alabama, we rarely have work just handed to us.  We always have to compete for projects against other companies (sometimes as many as 20 to 30 others).

No matter how good our reputation is, owners more often than not will want to take multiple prices.  So I would advise the same approach when you take prices from subs and suppliers.

Take at least 3 or 4 prices for each work item to see what the current market value is.  Who knows – you might find another diamond in the rough to start using on future projects!

Pre-Qualify Bidders Whenever Possible

On bid day, it is often unnerving to receive a price from a company you have never heard of.  Especially if their price is much lower than other quotes you have received for the same scope of work!

That is why it is beneficial to pre-qualify your subs and suppliers so that when you do get a quote that is extremely cheap, you can be confident about your decision to include or exclude that price from your estimate.

However, there will always be those random prices that trickle in.  So you will have to do your best to screen those companies very quickly on bid day to help make a smart decision.  If you can’t get comfortable with the company or their price, don’t use it!

In Conclusion

So if you are negotiating a price with a client, by all means use those subs and suppliers you have worked with in the past so that you can be confident of the product you will receive.

But if you are going into a competitive bid environment, you might be best served by pre-qualifying bidders and diversifying your sub list.

If you have any practices that you have found helpful regarding this topic, please leave a comment or feel free to contact me.

So what can we do?

Expand Your Sub and Supplier List

We all get in a rut of calling on the same companies to bid on upcoming projects.   I know in the commercial construction market in Montgomery, Alabama it is easy to get stuck in that pattern.

But if you want to have a chance, you need to cast a wider net and ensure you get the best coverage.  Low prices are coming out of the woodwork, so do all you can to ensure you get them.

Consider Self-Performing More of the Work

In the market conditions that existed just a few short years ago, general contractors could subcontract almost all of the field work and still land their share of the projects available.

But with an ever tightening bid environment if you don’t have the option to self perform any work, you are most likely going to be on the outside looking in.

Evaluate Your Overhead and Profit Margins

Sharpen your pencil and take any unnecessary overhead items out of your estimate.  If you aren’t going to need a line item, delete it.

Also, take a hard look at your profit margin.  If you drop it a percentage point or two, you could be in the drivers seat on your next bid.

In Conclusion

Following the same practices and hoping for a better result in futile.  So take some proactive steps to improve your changes to compete in today’s market.

If you have any thoughts about the steps you can take to be a more competitive bidder, please comment or feel free to contact me.

But there are a few options related to hiring a general contractor once the design is completed.

  Two of these options are to negotiate with a reputable builder or to take competitive bids from several builders (typically, the builder with the lowest price would be hired).  Here are some advantages and disadvantages of each.

Option #1 – Negotiate 

One distinct advantage to negotiating is that you can hand pick the contractor of your choice.  Since construction projects can often be daunting tasks for an owner, it is reassuring to start the process with a team that you, as the owner, have selected yourself.

Another advantage of negotiating with the contractor of your choice is that you can get this process started early.  During the design phase, the contractor can be brought in to help the project stay within budget.

Also, if there are some materials or products that have a longer lead time, these could be ordered so as not to delay the construction phase.  Involving the contractor in the design phase could help save a month or two on the back end of the project.

The main argument against negotiating is there is always the question in the back of the mind of the owner – “did I get the best price on my facility?”  But if the owner has done a good job selected his contractor, it helps allay any fears that might pop up. 

Option #2 – Take Competitive Bids

  The best reason to take competitive bids is to ensure that you are getting the best price that the market has to offer.

A commercial construction bid can have as many as 15 to 25 bidders in today’s tight economic climate.  So it really forces the contractors to trim any “fluff” from their proposal if they want to have a serious chance at the project.

The two main disadvantages to competitive bidding are that the low bidder might be someone the owner and architect do not know as well as the fact that the project cannot get underway until after the bid process is completed.

Which Option is Better

The answer is it depends on the situation.  If the owner has a good working relationship with builders and has liked the work they have done in the past, negotiating a project is a good route to take.

However, if the owner is a novice on the construction scene, and his main goal is to get the project built as economically as possible, then follow the competitive bid route and rely heavily on your architect to weed out any unqualified bidders.

Please comment below if you prefer one method of awarding a project over another or feel free to Contact Me.

These days, it is difficult to come up with a positive spin on the state of the economy and specifically the construction industry.

But there is a thin silver lining on a few of these gray clouds that are worth mentioning.

Two that come to mind are competition in pricing and the being able to hand pick more quality subcontractors.

Lower Prices for Materials and Labor

The obvious advantage of the down market is in price.  There are a few exceptions, but in large part there are deals to be had in the market place for goods and services.

Some of the items might have been over priced to begin with, but most are just cheaper because the market is flooded with an abundance of supply.

If you are a savvy general contractor, you can reap some definite rewards by shopping around to see which vendors are hungry and need to get rid of some inventory.  Any savings can help!  Especially since owner’s budgets are also getting tight during these lean times.

Better Access to Quality Subcontractors

A second advantage that doesn’t come to the top of your mind when thinking about this economic crisis is that the lower quality subs are fading into the sunset.

During the “fat years” when homes and commercial buildings were flying up all over the place, these second or third string subs were able to get plenty of work because the “good guys” were all tied up.

Many of us in the contracting business have been forced to use subcontractors who we knew were not A+ quality and then had to spend more effort and time over the course of a project doing lots of babysitting to ensure that the job was done correctly.

Now that times are tough and work is scarce, those subcontractors who can produce a much higher level of quality are once again available.  So there are much fewer diapers to change on the jobsite, and the result is a much better finished product for the owner.

So even in tough economic times, there are a few high notes that we can focus on.

Those of us who are general contractors need to take advantage of these opportunities and differentiate ourselves from the competition as a result.  It will help us have a leg up on other builders if we do so.

If you can think of other significant benefits not mentioned here, please leave a comment or feel free to contact me.

The Effect on the Labor Market

The labor sector of the industry is one area where there is a definite recessionary effect on price.

Most subcontractors, whether they are electricians or roofers or concrete finishers, are feeling the pinch and have taken steps to cut their prices to levels not seen in many years.  The construction boom of the late 1990’s and early 2000’s allowed most trades to “name their price” in regard to their services.

There was more work to be done than the skilled labor market could bear and prices increased as a result.  Now that the housing market has come to a halt and commercial construction prospects are not much better, the upward trend in subcontractor prices has reversed course and is headed downward quickly!

If you couple the lack of work with an abundance of subcontractors who have nothing to do, and it makes for an owner’s dream when it comes to discounted prices!!

The Effect on Building Materials

The material sector is a little harder to put a finger on.  There are some items that are selling for less than what they were 2 or 3 years ago.  But there are also just as many that cost as much or more than they did 2 or 3 years ago.

Part of the reason is simple supply and demand.  When lumber prices dip because there is a lack of demand, then the lumber mills start to close down which dramatically cuts supply.  This seesaw effect creates an equilibrium in the marketplace and slows the rapid price decline.

Other materials like roof shingles escalated with the increase of petroleum prices a couple of years ago and tend to mirror the price rates of the fuel market.  However, both of these material examples are also effected by seasonal and environmental factors.

When summer rolls around, bringing sunny days and milder weather, construction picks up and so do prices.  Also, with the summer conditions comes hurricane season.  Oddly enough, shingle prices increase at the potential for a hurricane (whether we have actually had one make landfall or not).

The Effect on Appraised Value

The unfortunate factor which indirectly affects each construction project is what the economy says the project is worth.

Yes, you may build your million dollar facility for $900,000 and save that 10%.  But when the appraiser runs the numbers and says your million dollar facility is worth only $910,000 (thus cutting your equity by $90,000), did you save 10% or just 1%?  That is for you to decide.

In Conclusion

As you can see, there are some significant effects of the economy on the direct and indirect costs of a construction project.  But in the end, it is still a great time to build a building if you have the working capital to get off the ground!!

If you know of other economic factors that would affect construction costs, please leave a comment or feel free to contact me.