The Beauty of Public RFPs and of Course the Ugly
Over the past six months, I have had the wonderful privilege (ahem) of bidding about 15 public Requests for Proposals.
While I have complained constantly about the process, I probably wouldn't have any work at all at the moment if they were not available.
As a brand new company there are very few private owners that would take a chance on an untested and unproven no-name.
However, in the world of public bidding, while a municipality may not want to take a chance on an unproven no-name either, the law simply states - they have to.
I take that back, they don't have to.
What they do have to do is give the job to the lowest responsible bidder.
Of course responsible is the key word there and they could make a contractor look irresponsible rather quickly if they wanted to (or if a few Benjamins were slipped into their pocket).
But the reality is that there are tax dollars at stake and all information regarding bidders is one hundred percent public.
So if a town wants to disqualify a low bid, they better have darn good reason to do it, or some villagers may get quite angry.
If a low bidder is able to produce a bid bond as well as the necessary insurance requirements, I would think that it is a very difficult sell for a town to disqualify a bid.
If they did, I wouldn't be surprised if some rumblings began around town about councilmen with "greasy pockets".
I used this system to my advantage by going after these public bids and bidding at rock bottom prices.
And when I say rock bottom, I mean rock bottom.
I looked high and low for the lowest sub numbers and then marked them up a meager 5% plus a few miscellaneous overhead costs.
This is honestly the climate we are in right now.
Which conveniently brings us to the ugly side of public bidding.
I have seen at least five bidders on these jobs and at most 14.
With fourteen bidders, it is nearly impossible to get the job unless you grossly underestimate the cost.
Once you start the job, don't expect to get paid anytime soon.
Payment applications have to go through a hierarchy of bureaucracy that rivals (gulp) the federal government.
And trust me, you don't even want to get me started on prevailing wages.
Prevailing wage is a way for unions to remain competitive on public projects.
Every county in Pennsylvania publishes a rate for every trade and requires that you show certified payroll proving you paid your employees this rate.
The paperwork required to get paid begins to turn into a novel.
And if you screw up one line item or forget to include one worker's timesheet? You better wait until next month.
The process of getting paid moves slower than molasses in January.
Of course some contractors cheat on this and show one thing through payroll while they are in reality paying something much lower.
I don't know if this is even enforced, but I'm not going to find out.
However, I will say that these cheaters are very difficult to beat.
They can probably cut their labor costs in half producing bids that are consistently 25% lower than mine.
It's a tough game, but as a new contractor, you have to take what you can get.
While I have complained constantly about the process, I probably wouldn't have any work at all at the moment if they were not available.
As a brand new company there are very few private owners that would take a chance on an untested and unproven no-name.
However, in the world of public bidding, while a municipality may not want to take a chance on an unproven no-name either, the law simply states - they have to.
I take that back, they don't have to.
What they do have to do is give the job to the lowest responsible bidder.
Of course responsible is the key word there and they could make a contractor look irresponsible rather quickly if they wanted to (or if a few Benjamins were slipped into their pocket).
But the reality is that there are tax dollars at stake and all information regarding bidders is one hundred percent public.
So if a town wants to disqualify a low bid, they better have darn good reason to do it, or some villagers may get quite angry.
If a low bidder is able to produce a bid bond as well as the necessary insurance requirements, I would think that it is a very difficult sell for a town to disqualify a bid.
If they did, I wouldn't be surprised if some rumblings began around town about councilmen with "greasy pockets".
I used this system to my advantage by going after these public bids and bidding at rock bottom prices.
And when I say rock bottom, I mean rock bottom.
I looked high and low for the lowest sub numbers and then marked them up a meager 5% plus a few miscellaneous overhead costs.
This is honestly the climate we are in right now.
Which conveniently brings us to the ugly side of public bidding.
I have seen at least five bidders on these jobs and at most 14.
With fourteen bidders, it is nearly impossible to get the job unless you grossly underestimate the cost.
Once you start the job, don't expect to get paid anytime soon.
Payment applications have to go through a hierarchy of bureaucracy that rivals (gulp) the federal government.
And trust me, you don't even want to get me started on prevailing wages.
Prevailing wage is a way for unions to remain competitive on public projects.
Every county in Pennsylvania publishes a rate for every trade and requires that you show certified payroll proving you paid your employees this rate.
The paperwork required to get paid begins to turn into a novel.
And if you screw up one line item or forget to include one worker's timesheet? You better wait until next month.
The process of getting paid moves slower than molasses in January.
Of course some contractors cheat on this and show one thing through payroll while they are in reality paying something much lower.
I don't know if this is even enforced, but I'm not going to find out.
However, I will say that these cheaters are very difficult to beat.
They can probably cut their labor costs in half producing bids that are consistently 25% lower than mine.
It's a tough game, but as a new contractor, you have to take what you can get.