Contractor's Corner: Tips for specifying a commercial flooring job - June 2018
By Dave Stafford
The ability to get a commercial job for your company often directly correlates with how successful you are in specifying the components of that job. And that starts with an understanding of what the client wants, can afford or absolutely requires. Sometimes what the client will tell you may not be accurate and will require questions and investigation. Be inquisitive and have a prepared list of items to ask, much like the doctor in an exam or a detective on a case.
Probing for answers may be met with some resistance; however, the best way to deal with that is with a smile and a solution-oriented attitude: “The better I understand your ideas, budget and timeline, the more accurate I can be with presenting viable options. Fair enough?” Once you’ve amassed this pertinent information, you can begin the process of pulling together various components. Most clients will need three or four options from which to choose with multiple price points.
ADVOCATE FOR YOURSELF
You always have a better chance if you are specifying the product. Come in first with quality products from one or two manufacturers where you have a key dealer pricing relationship and a solid credit line to nail the specification. If you’ve talked with the mill rep before presenting a package of products, you’ll likely end up with some advantage and perhaps special defined project pricing. If you are able to, present an effective answer to the client, then lock it up to thwart “or equal” product submissions from mill competitors. Push your own product mix where you have an advantage.
Consider a soft submission when there is an architect or interior designer involved and you have an idea for a better product or one more favorable to you. A soft submission is one that is made informally; if you get some traction, then you can formally submit. Here’s one way to do it: “Jeff, I was reviewing the Atherton project, and you’ve specified a really nice patterned carpet. I have another product that may save your owner some money and have a faster delivery time. I’d like to send a sample over to you for a quick look. If it looks okay to you, I’ll submit as an ‘or equal’ officially. Just let me know with a quick email, okay?”
BE CLEAR AND CONCISE
Offer easy-to-understand product options without too many variances. Clear-cut choices separated into good, better, best with several color palettes are ideal. If you offer too few options, the client may feel you are not spending the time needed to give him the best selection; by offering too many, the client can feel you are using a “shotgun approach” and are not being specific enough for his needs. What you want to hear is, “Finally, someone understands and has given us a design concept that reflects our culture.”
Where possible, use budget dollar range packages that vary according to product type or quality rather than method of installation. Here’s why: a certain amount of any project delivery and installation involves site prep and mobilization, including supervision and inspection; the actual difference in price between carpet, resilient or ceramic installation may not be great. Be clear that the dollar ranges are estimates based upon the anticipated square footage. Be prepared to explain why there is a price differential between flooring selections as well as method and time of installation.
Certain product selections may require greater overage in manufacturing and the minimum cost is greater even though the square feet to be covered is the same. Pattern matching in installation may require higher skill levels in the installer (such as CFI Masters II versus a CI certification). In one case, an intricate pattern in the Axminster carpet for corridors required triple the normal time to install.
SPECIFYING THE SCOPE OF WORK
Scope of Work (SOW), job complexity and delivery are all an integral part of specifying a commercial job, every bit as key as product specification. Often, the method of floor preparation is critical, and I’d suggest detailing it like this: “The existing attached cushion carpeting will be removed by mechanical and hand scraping and the adhesive residue will be removed using shot-blasting and cleaning with an industrial detergent, rinsing, and then, after drying, application of a poured cementitious floor leveling compound. After curing, any uneven areas or ridges will be removed by scraping or sanding followed by vacuuming prior to installation.”
Change orders for extra items outside the original SOW can enhance your profit or be a source of frustration and dollars lost. After you get the commercial job, make sure that the person signing a change order has the authority to grant the approval. I learned an expensive lesson on a group of change orders, when, after the work had been performed, they were rejected for payment. The job superintendent said, “Well, yes, I signed those change orders, but I was just acknowledging that the work had been performed. Only the project manager has the authority to approve dollar changes in the contract.” A wily comment from one who was burned is, “Don’t spend a dime until it’s signed and by one who has the authority.”
Delivery time and performance dates can be critical and, if so, state that in the SOW. “Time is of the essence in this project, and once started, work is to be performed on a continuous basis, Monday through Saturday, with final delivery and installation completion no later than June 16, 2018.”
Some buyers may include onerous penalties, too. “There will be liquidated damages of $500 per day assessed after the final completion date.” Be on the lookout for that since this can be a terrifying provision if you are at the mercy of other trades that prevent you from working in an efficient manner. Start documenting any delays early and bring it to the project manager and site superintendent for relief. Prepare your project files as if you knew you were going to court to reclaim monies withheld from you. A day or two is one thing, 18 days is a disaster! In one project, a deduction for $4,000 was taken as my “share” of liquidated damages, assessed from five different subcontractors. We negotiated a 90% reduction after presenting a litany of written complaints showing repeated site disruption from other trades.
FACING DOWN BIDS
Even if you’ve been successful in specifying a commercial job, you’ll likely face some type of bid scenario. If you’ve asked enough questions, you probably know what form the bid will be. Be thoroughly familiar with the requirements of the bid and what must be submitted.
An informal bid means that the buyer may just be collecting some pricing and will make an award based on price, value or some other criteria known only to him. This is a good situation if you have specified the job and have a good rapport with the buyer. This is usually done with lower dollar, relatively uncomplicated purchases.
A negotiated bid may also be an informal bid, but it signals that while various prices may be obtained, the buyer reserves the right to look at price, value, experience or other nuances to ratchet down prices or increase value by adjusting what the contractor will provide. The buyer may be astute in auctioning off the bid by playing one bidder against another. The key point is that the buyer has some latitude in making an award. This is a great opportunity if you are good at reading people, asking questions and selling your company.
A request for quotation (RFQ) generally means that while the buyer has an end result in mind (hopefully he has selected your product to fulfill the need), he is asking for you to propose the best solution and give him a specific quote for labor and materials. This may be done informally or may end up being negotiated.
Formal bids are those where the purchaser outlines in detail exactly what they want you to cover in your bid. This is stated in a comprehensive SOW. You may not propose a different solution even though you might feel you have a better product or method. I made a mistake like that on a formal bid and was told by the contracting officer, “While I appreciate your zeal, your bid was ruled ‘non-responsive’ since you didn’t provide what we asked for in the bid document.” Always read the bid document carefully and fill in all the sections required.
Mistakes to avoid with bids include late return of a completed bid; failure to sign the bid document; improper, incorrect or incomplete pricing; no inclusion of a bid bond or payment and performance bond information; and no criteria outlining experience and reference credentials.
Always attend any public bid opening. You’ll be able to find out about the bids that have been submitted. Sometimes, if the group is small, the actual bids will be passed around for a cursory look by all attendees.
You have your first chance to gauge how successful a protest might be if you are not the winner. If you were very low, you may have time to withdraw your bid before an award if you left things out, or you may have a chance to negotiate an increase. I was the low bidder by 30% on a project; the buyer looked at me strangely and said, “While it looks like you are the low bidder, I’m not so sure you are the winning bidder.”
After the meeting broke up, he pulled me aside and said, “Look, you’ve always done solid work for us. I have ten days to make an award, and I suggest you review what you submitted and give me some feedback.” Of course, he didn’t have to do that. In the interim, I looked at all the numbers and found I had made a substantial transposition error, which accounted for the difference. I explained what had happened; I brought in the workpapers clearly showing the error. The buyer said, “Okay, I see the error; you can’t make up all the difference, but I’ll let you increase your bid. However, you cannot exceed the price of the next lowest bidder and still get the award.” Had I not attended the bid opening, I would have been blindsided by the award and also not known the next lowest bidder’s pricing.
Specify that next job with a friendly supplier, spell out in detail what is needed for the job, doublecheck your numbers and the bid document criteria, deliver on time and stay for the bid opening. You’ll be surprised at how successful you’ll be. Good luck.
Copyright 2018 Floor Focus