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View Full Version : Very Large Company Beat my bid


TexasFire221
09-02-2011, 09:10 AM
We are new to irrigation. We have repaired many many systems but only installed 2 news. Well we put in a bid for a new commercial project two weeks ago and the owner called me yesterday to inform me that another company beat our bid. This doesnt bother me although we really need the work with the horrible drought we are in, but I am mainly concerned that they beat our bid by half. They are the big guys and would have guessed 100% that our bid would of been less.How could this be? Are they getting materials that much cheaper by buying in bulk? I thought we were getting a good price on material online which was cheaper than what the local Ewing was giving us. Can someone help me understand this? They even beat my sod install by $1,000 and I knocked it down $25 a pallet because of the bulk. I just dont know how they are doing it.

mitchgo
09-02-2011, 09:45 AM
you get what you pay for

Don't worry, you'll be back to fix everything in a few years

FIMCO-MEISTER
09-02-2011, 10:31 AM
Ditto from west Glacier
Posted via Mobile Device

Mike Leary
09-02-2011, 08:05 PM
Ditto from west Glacier

Pics? We must have pics!:clapping:

Wet_Boots
09-02-2011, 08:28 PM
Shhhhhhhh, be vewwy vewwy qwiet. He's hunting gwaciews

Mdirrigation
09-02-2011, 09:39 PM
you say you are new to irrigation, only have installed 2 systems ,buying parts online , and this was a commercial job. And your bid was twice that of a larger established irrigation company , Sounds like you either screwed up the bid , or the larger company is hungrier than you . Yes they probably get a much better price than you at the supply house , they buy a lot more .

I see it quite a bit here new guys bidding higher than the established companies , basically due to lack of experience.

txirrigation
09-02-2011, 10:20 PM
Dont expect to get a good deal at Ewing.

johnsonslawnmanagement
09-02-2011, 10:31 PM
What I have seen locally is the low bidders are spacing rotors with barely any overlap, say 6" or less. Doesn't amount to a hil of beans on a small scale but over a large commercial property it can add up. There are many ways to cut corners and shave off on a bid but beating you by half, one of you is way off.
And on the sod: they guys rolling out sod here on commercial jobs are installing for $ .25 a yard.
Posted via Mobile Device

txgrassguy
09-03-2011, 09:48 AM
Some of the replies are relatively accurate, however, without seeing site details/bid specification and the guts of your bid I cannot say to what extent.
Regarding sod, again depending upon site conditions especially at a commercial site, almost always the palletized sod supplier provides the installation and not the irrigation contractor.
And yes, larger companies buying in bulk receive better material pricing - it is called economy of scale and is also quite difficult for a smaller operation to match.

koster_irrigation
09-03-2011, 10:51 AM
sums it up
you say you are new to irrigation, only have installed 2 systems ,buying parts online , and this was a commercial job. And your bid was twice that of a larger established irrigation company , Sounds like you either screwed up the bid , or the larger company is hungrier than you . Yes they probably get a much better price than you at the supply house , they buy a lot more .

I see it quite a bit here new guys bidding higher than the established companies , basically due to lack of experience.

ArTurf
09-03-2011, 11:42 AM
In my town there is one other irrigation company. He is going to be cheaper in most cases. Here are some of the examples why. He does not believe in head to head spacing. An example how he does things: in a 20' x 60' area he may use 2 rotors choked down vs. my 8-6" MP Rotators. I have seen him spray over a 5' walkway to avoid separate zones. Needless to say he can give a cheaper quote. I try to explain to customers such things in my quote but the average customer will not understand and will just look at the price. One thing I will mention is they might want to talk to a current customer of mine who has dealt with the other contractor and their experiences with them.

But the reality is he is going to get most of the jobs in my area. In my state there is no regulation of irrigation so anything goes. Sad but true.

Waterlogged
09-03-2011, 06:02 PM
Without more information, it's hard to say whose price is right. There are alot of variables. Buying in bulk is one. If his labor is more experienced, then they may be able to work faster and more efficiently than your crew.
We have quite a few larger companies in our area who can outbid us because they can put a large system in quicker.
As far as buying online, I wouldn't recommend it. You really need to build relationships with the supply houses in your area. Once you get a relationship with them, they would be more than happy to help you out with pricing. They may be able to help you with other information, too.

Mike Leary
09-03-2011, 06:19 PM
Some of the above, but that's not the reason. Low-bidders are slimeballs, they'll cut corners where ever they can, if they have a warranty (and will return calls) it will, at best be two years. Crap systems will usually last that long before plant (death) issues come up, that's when we got called in and it got expensive and, usually, never was able to be cured. The best one I had was our local Fire Dept. was sick and tired of me nickel-dimeing them to death over failed systems: they hired me to design a new system and they put it out to bid. At my suggestion, I was also hired as "Owner's Representative" and supervised the install. I was blown-away how those slimeballs cut corners at every chance, I was the most hated guy on their site, but the job was done to my specs and the system works as advertised to this day. :clapping:

TexasFire221
09-03-2011, 11:39 PM
I understand that they get a better deal by buying in bulk but there is no way its that much better. I found out today from someone in their area that they are using illegals at $30 a day. They house them all on the property. Im not exactly how accurate this is but I dont see why he would have a reason to lie to me. My company is new to irrigation but my irrigation guy is seasoned. We are WELL below the local plumber that installs in the area, I heard from a new customer the other day that they went out to replace a hunter 6 zone controller and invoiced them $1,200.00.

TexasFire221
09-03-2011, 11:42 PM
I have had issue with the local Ewing guys is the reason I buy online. It is a 80 mile round trip also so buying online saves fuel because they ship directly to my door for free. Like I said I am new and not sure what a great price for supplies are but I can buy cheaper online and save fuel.

GreenI.A.
09-04-2011, 01:14 AM
I going to confirm what most others are saying. Larger companies will receive better whole sale pricing due to their purchasing power. Other costs are often much less because the fixed overhead is spread out over more customers. Are you renting a trencher or puller at 250 a day? They have theres paid for, or if they are carrying a note on it, they are probably paying 250 a month, speading that same payment across 4+ installs.

Different companies do it differently. Some large companies have the mindset that because they can do it cheaper they will chrge less. Other large companies have enough customers that they can safely charge a large premium and still maintain a growing customer base.

rlpsystems
09-04-2011, 09:07 AM
whatever.....................................................

GreenLight
09-04-2011, 10:54 AM
I going to confirm what most others are saying. Larger companies will receive better whole sale pricing due to their purchasing power. Other costs are often much less because the fixed overhead is spread out over more customers. Are you renting a trencher or puller at 250 a day? They have theres paid for, or if they are carrying a note on it, they are probably paying 250 a month, speading that same payment across 4+ installs.

Different companies do it differently. Some large companies have the mindset that because they can do it cheaper they will chrge less. Other large companies have enough customers that they can safely charge a large premium and still maintain a growing customer base.

Agreed. I personally think you are probably getting beat much more on the "efficiency" side as opposed to the "materials". Im a small timer and can't really compete with the efficiency that large companies bring to the table. Like Green Industry said, if the large company can roll up to the job with every piece of equipment needed and a decked out irrigation trailer, they are already so far ahead on money saved that you are playing catch up before even starting. Couple that with the fact that irrigation experience amongst employees is an unbelievable time saver. Im lucky to find guys I can trust to glue pipe and put on heads properly. Many larger companies have experienced crews who have specific jobs on site and they are blowing through it an an unbelievable pace. Are they killing the installation market with low pricing? Yes probably, but if they can make their numbers they don't really care. The good news is with every system installed, the service customer base gets bigger even if it's not your install.

txirrigation
09-04-2011, 11:49 AM
Agreed. I personally think you are probably getting beat much more on the "efficiency" side as opposed to the "materials". Im a small timer and can't really compete with the efficiency that large companies bring to the table. Like Green Industry said, if the large company can roll up to the job with every piece of equipment needed and a decked out irrigation trailer, they are already so far ahead on money saved that you are playing catch up before even starting. Couple that with the fact that irrigation experience amongst employees is an unbelievable time saver. Im lucky to find guys I can trust to glue pipe and put on heads properly. Many larger companies have experienced crews who have specific jobs on site and they are blowing through it an an unbelievable pace. Are they killing the installation market with low pricing? Yes probably, but if they can make their numbers they don't really care. The good news is with every system installed, the service customer base gets bigger even if it's not your install.

Well said. I have a few crews, and out of those crews I have my core guys that never leave. When I get a bid on a large comm. system I block out x amount of days for all the crews that I am running and get the job done quickly.

I split up the zones amoungst the crews and each guy knows what his job is. We installed 74 zones in the same amount of time a smaller company insalled 25-28 right down the street. Less time on site= less operating costs.

Labor is the main cost on installs over 10-12 zones. When you have seasoned Irrigation Techs and they have trained the grunts well, you can get things moving fast. One of my crews has just 3 men, and they can do the same amount of work as my 5 man crew. They get paid accordingly, and live very nice lifestyles as a result. Each one of them could be taken out and made a forman, but I am not about to split up something that works.

Trust me you will start finding things that work, and save you money. I sent you a PM.

koster_irrigation
09-05-2011, 09:38 AM
Could someone define a "very large irrigation company" (and dont say choate)

are we talking employee count or customer count ......

Ive never referred to myself as a very large company, but would love to
hear some input as the point that people would start to refer some as a medium sized to a large co.

FLCthes4:11-12
09-05-2011, 09:52 AM
The op made the mention of the sod cost as well. They may be doing the irrigation very discounted to get the other work. Also I'v seen the national providers install a job at 1-2% profit only to get the maintenance, spraying and Enhancement work that operated on much inflated margins. If it was only your 2nd system and you didnt get it. It may be a blessing disguise. And in my opinion if I was relying on my "irrigation guy" to guide me that in itself would make me very nervous you need to know whats going on mot rely on an employee that is app to call in sick, want a raise or quit, then there goes your irrigation dept.

Mike Leary
09-05-2011, 11:45 AM
My mentor once told me, "you don't want all the work, only the good ones."

AI Inc
09-05-2011, 05:00 PM
My mentor once told me, "you don't want all the work, only the good ones."

I aim for 3 out of 5. Less then that I will lower price a bit , more I will raise it.

Mike Leary
09-05-2011, 06:20 PM
I aim for 3 out of 5. Less then that I will lower price a bit , more I will raise it.

I told a would-be client to stick it years ago 'cause he/she were Cali transplants with a "me,me,me" attitude. I realized on the way back to the shop that I prolly screwed myself and the crew 'cause it would have been a nice 30 zoner to take us into the fall. After a couple of beers wondering about my attitude, the phone rang, turned out to be a software couple that were on a fast track. No questions were asked about price, because it was a referral, so we swung in and did one mo/fo system that I could not have done if not for bailing on the "gut feeling" job. Follow your instinct......and bliss. :dancing: