Choosing a contractor based solely on price is like buying a “Rolex” from one of those trench-coated guys on a Manhattan street corner. Anyone can create a buzz and offer you some too-good-to-be-true deal.
But in the end, all you’re left with is a crappy watch and a bad taste in your mouth.
We all want our endeavors to succeed and run smoothly, and certainly expensive and prolonged construction projects are no exception.
This is exactly why you should never take the lowest bid from a contractor. Doing so almost guarantees your project has started, and will end, on the wrong foot.
Here’s why you should avoid the lowest bid at all costs. Discover how to side-step the major pitfalls of large scale construction projectsFree e-book
DON’T GET SCREWED
Standard Model Or Custom Fit?
Question: say you could buy a computer that’s the manufacturer’s standard model, or for the exact same price, you could get a computer that’s customized with every feature and spec you asked for.
Which computer would you choose?
Tendering is giving you the manufacturer’s standard as opposed to the custom model.
When you hire a “standard model” contractor, you’ve got someone who’s more invested in their interests than they are in giving you a quality product and a fair price.
They’ll focus on completing your project at their lowest cost.
They’ll order inferior materials, cut corners, create costly change orders and delays, and generally take advantage of you and your project to best line their own pockets.
By not forming a solid relationship first, you can’t know if they’re a good fit, and you’re unable to judge their abilities or expertise.
A good relationship with a contractor or CM should include customizing the project to fit you, and not be some cookie cutter template.
Less is More
Many years ago, typical tendering processes would have four to five contractors at most. Nowadays there can easily be 10 or more, and upwards of 17 have been known.
Remember the adage, “Too many cooks spoil the broth”?
When you have so many people bidding against each other at the same time, you must ask yourself, who will make the first mistake, or who would leave money on the table by going at or below cost?
It’s not a matter of getting the lowest bid.
You’ll soon discover the low bid missed many details of your project. Headaches will follow, likely for the rest of the road. You’ll hit one obstacle after another.
Your entire experience will, frankly, suck.
Used Drawings
Consultants who are responsible for a project’s drawings have fees practically set in stone from the outset.
To save time and cut their labor costs, the drawings they provide can be copy-pasted from as many as five projects back.
No surprise, problems arise when drawings have significant deficiencies and inaccuracies, causing huge gaps to form all along the way in a given project.
The Resulting Lows Aren’t Worth the Initial Highs
While you excitedly think you got a really great deal on your construction project, the reality is the hidden costs of low bids will catch up with you, and sooner rather than later.
And you’ll have no one on your side since there were no relationships formed prior to that low-low bid being accepted.
Contractors will see you and your project like another notch on their bedpost.
The accountability, transparency, and trust you deserve simply won’t be there. You’re setting yourself up for undue stress, aggravation and a potential litany of “unexpected” costs.
Don’t just accept the lowest bid that comes knocking on your door. Do you research, inform yourself, ask pertinent and important questions before entering into any agreement with a contractor.
Take advantage of that time prior to hiring anyone – because that is the time you have the biggest advantage and the most leverage in your entire project.
Make damn sure the people you’re handing your assets, passions, hopes and dreams to are in it with you, and not just in it for themselves.
If you’d like help guaranteeing you’re working with people that are on your side, send me an email with the subject line – Risk Free Construction Solution.
steve@whitehornfinancial.com
Because it’s time to understand what you’re buying, and it’s very unlikely you will get that from a contractor.
