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View Full Version : Public bids... why are so many bid so low?


Ramairfreak98ss
03-02-2012, 03:34 PM
Sat in the bid opening for one of the local municipalities... There were 9 bidders they opened...

There were two bids each, one included 30 week lawn mowing for the season, including trash duties "empty public waste cans, new bags & dispose in dumpsters" as well as restroom cleaning for the season. It didnt stipulate if those duties were daily, weekly, monthly etc.. but i'd assume they'd want the restrooms restocked and cleaned more often than once a week. Because we didnt bid until close to the end, and no one returned us a definite answer in time, we did not submit the bid.

Second bid # was for lining/dragging/striping all the soccer,football, and baseball fields, there were six total sites, a mile apart from the main one, all in center town, the main site was about 110 acres, another was 22, and all the rest were only buildings with trimming maintenance on the main road and a park with a gazebo next to a creek, a "scenic park" area. Total of about 140 acres max.

There were 10 baseball fields, 4 football fields, and 3 soccer fields... some of the soccer fields overlap the baseball fields, but theres a lot of open space in between many areas. We estimated just in paint and lime alone for the year would cost us $4500-5000... that might be low.

Monday-Saturday between 2-5pm, yeah 6 days a week, you redo the baseball fields, touch up the soccer and football fields and redo all lines on soccer/football once a week... I would assume it would take a couple guys at least 1 to 1.5hrs a day, and 25 mins travel to/from shop so figure 2 to 3.5hrs x6 days a week plus supplies.

Dragging the fields we could do with a small garden tractor and pull around chainlink fence with some weights and the 2nd guy would manually touch up small areas like batters box etc.

So the low bidders were $12,000 and $7200
$22,325 and $5,630
$29,900 & $8,700

I havnt even gotten to what i consider our "low bid" competition in the areas lol. Two local companies bid very close to each other, and i know one, "clintar" with green trucks, has outbid us on other municipal/school work two years ago at nearly half of our bid, and half of what the previous company was getting per season.

Their bids were $34,500 and $36,400 clintar
company #2 $32,500 and $36,500... how they were that close.. i doub't its a coincidence.

Brickmans, $39,026.00 and $20,600.... which not sure why their 2nd bid portion was so low on that scope of work.


I worked out most of the bid anyway, came up with roughly 2 full days, 3 man crew, leave trailer there one night even though its only a half hour from our shop. They'd be on the clock for roughly two 11hr days, minus hr for lunch each day, so 60 man hours to mow, trim, blow off, trash duties and "i was hoping" could squeeze in the public restroom duties at the end of day #2...

My estimate was $54,000 mowing inc. trash duties., $3500 in mulch work, $13,500 cleaning restrooms, trim and pruning work inc. spring and fall cleanup... totals $72,600.. we havnt even gotten to the 2nd bid #.

We have enough machines to have lots of guys mowing/working, but its not productive to really have more than a 3-4 man crew, ever... But we could put a 4th on this crew if we had to.

I broke down everything to how many acres per hour we could mow wide open, semi wide open and not wide open, and with each machine.

We would either have two 72" ferris zero turns or one 72" and one 61" machine going for nearly both full days, and one guy trimming/edging, alternating with mower guys every couple hours. We could put a 15' batwing mower on our JD tractor, but then would likely have to leave it there 24/7, switch to turf tires, and a $50k+ tractor w $12-14k mower attachment doesnt make sense for the contract price either.

For the 3, maybe 4 man crew, i estimate gross billing at $900/day, since our two man crews can do $700+ in a 7-9hr day easy doing just basic residentials.

If we cant get the restrooms done each week in those two mowing days, it would take 2 of our guys 3hrs total plus half hour each way, so 8 man hours on the clock to do all janitorial duties... this is if we could even handle it internally and not have to sub out to a janitorial company.

8man hours week = $400 week
Soap 1g, paper towes cleaners, etc. $another 1200 per season.

At even brickmans highest bid of $39,000... that would mean we'd bill about $400 a day for all that work?

My initial estimate for the lining/dragging etc was for two guys , 6 days a week, taking 6hrs on the sites including travel... i reduced it to 3hrs, because half hour each way and 2hrs work is probably doable.

Thats still $43,200 for 6 man hours a day, x 6 days wwk, @40.00/hr x 30 weeks, plus $4500-5000+ in supplies. Again, highest bid was $36,400, lowest $5,630.00 LOL

There were so many odd ball and low bids, that even the companies i consider low ballers were bitching and reviewing the bids, but its just two numbers, nothing to see broken down anyway.

I'd be glad to hear any of your experiences on this type of work.

Oh, and i'm not sure how the one 2nd company could even do this work because im positive they have two zero turns, all they do is lawns usually, a Dixon 48 or 61" and another machine thats probably a 60" mower too,, maybe a Husler water cooled or something. I'm worried two 72"s would take eternity let alone anything less :/






Lowest bid was

tailboardtech
03-02-2012, 06:27 PM
well i work for a municipality and can honestly say nothing surprises me anymore. we do contract inspections and ever since the economy went in the crapper i have red flagged at least 40 contractors for failure of there jobs (meaning they can no longer bid on county contracts ). no surprise these people are the one's that are 2000 and one was almost 10000 cheaper that all the other bids the county's never learn cheapest isn't always the best.

Ramairfreak98ss
03-02-2012, 08:02 PM
well i work for a municipality and can honestly say nothing surprises me anymore. we do contract inspections and ever since the economy went in the crapper i have red flagged at least 40 contractors for failure of there jobs (meaning they can no longer bid on county contracts ). no surprise these people are the one's that are 2000 and one was almost 10000 cheaper that all the other bids the county's never learn cheapest isn't always the best.

Yeah, well you can estimate that it would cost the county a minimum of about $80,000 per year salary to pay two guys full time including benefits maybe, to handle this work and maybe some snow in the winter. But still, why would they entertain bids that are $30k or less when they know the bids should start at 50-60k?

JB1
03-02-2012, 08:27 PM
i go with they are dumber than a sack of rocks theory.

Dr.NewEarth
03-02-2012, 08:27 PM
A larger company spreads its overhead costs amongst more employees, making their hourly labour cost lower.

On the other hand. There is a city lawn cutting contract that I know of that was granted for 158 thousand a year for many many years. Two guys from that company knew the price and under bid on the contract behind the owners back. They put in for 96 thousand, got the contract, bought a truck, trailer, big mower and other tools. After two years they were dead in the water.

One of the problems with underbidding, besides the obvious just stated, is that the clients budget gets set low for the following years. That other money gets allocated to other things and it's hard to get it raised again.

Other companies that are realistic about the cost of business and bid higher than the new budget lose out. Then the quality of work goes down, less gets done and so on....

Ray_Lawns
03-03-2012, 02:49 AM
I was looking at a bid this morning and was going to take a ride and start planning to bid untill i did some research. It is for maintenance on a levee that totals 32 acres. The bids for the last time were 2,245, 4,150, 18,735, 35,440 and 35,760. Two grand for 32 acers on a levee that has to be cut biweekly is insane.

doyles
03-03-2012, 09:11 AM
you got to remember. when it comes to city or county bids these guys can get a list of current bid prices. there is no figuring out prices they drive by the area for bid look at what it is going for cut that price by a quarter put there bid in they get it. and this keeps repeating untill its not even worth looking at the bids.
i think when something goes up for bid you should not be able to see the current bid prices. this way you would have to look at the job and figure out the your cost. this way it might bring the bid prices closer together.

doyles
03-03-2012, 09:20 AM
A larger company spreads its overhead costs amongst more employees, making their hourly labour cost lower.

On the other hand. There is a city lawn cutting contract that I know of that was granted for 158 thousand a year for many many years. Two guys from that company knew the price and under bid on the contract behind the owners back. They put in for 96 thousand, got the contract, bought a truck, trailer, big mower and other tools. After two years they were dead in the water.

One of the problems with underbidding, besides the obvious just stated, is that the clients budget gets set low for the following years. That other money gets allocated to other things and it's hard to get it raised again.

Other companies that are realistic about the cost of business and bid higher than the new budget lose out. Then the quality of work goes down, less gets done and so on....

this is another good example of not knowing how to bid.
the contract went for 158 thousand the to guys found the price out
and they cut 62 thousand of the current bid price. no figuring out.
people don't think of the bigger pitcher insurance,gas,maintains
don't forget the big one TAXES

corey4671
03-03-2012, 09:27 AM
Two things I don't even bother to bid anymore. Government and cemetaries.
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White Gardens
03-03-2012, 10:51 AM
Just baffles me.....

I just don't see how anyone thinks that they could come close to making a profit on something like that.


....

WeedWhipper
03-03-2012, 09:38 PM
This thread couldnt be any more true!! I was so upset last week, I bid on our city's "non-compliance" residential work, they wanted it in an hourly rate. I came in second with a bid of $50 an hour followed by 55 65 all the way up to 100 an hour by many of the respectable large companies in town. The winner got it with a low bid of $25 an hour. UN-FRICKEN-BELIEVABLE!!!!!! My gas and employee cost is almost that. Long story short it is a start up business this year with no experience, the kids website says he just got home from iraq and started up this winter. I called him to say congrats and goodluck with your new business! I expect a call from the city by late April or May! :)

32vld
03-04-2012, 02:37 PM
This thread couldnt be any more true!! I was so upset last week, I bid on our city's "non-compliance" residential work, they wanted it in an hourly rate. I came in second with a bid of $50 an hour followed by 55 65 all the way up to 100 an hour by many of the respectable large companies in town. The winner got it with a low bid of $25 an hour. UN-FRICKEN-BELIEVABLE!!!!!! My gas and employee cost is almost that. Long story short it is a start up business this year with no experience, the kids website says he just got home from iraq and started up this winter. I called him to say congrats and goodluck with your new business! I expect a call from the city by late April or May! :)

Thing is this guy thinks he's going to get paid $25 hour. So he is very happy. In time he will think things through further when he realises the costs of doing business.

Living home with mom feeding him, using dad's mower, his business model shows almost zero costs.

cgaengineer
03-04-2012, 02:45 PM
I bid on a church 2 weeks ago, every week for the front, every two for sides and rear. We also included 4 chem apps for front. Front 3 acres and rear 6.5, I was at $22,800 and I was outbid by a bidder who bid $13,500.
Posted via Mobile Device

doyles
03-04-2012, 06:14 PM
i know its been long enough that i should not be surprised by how low these people think they can do the work for but WOW.

Mahoney3223
03-04-2012, 06:16 PM
yep cemeterys routinely go for peanuts. any public job is a joke anymore.

BrendonTW
03-06-2012, 12:23 AM
I'm lucky to have become known quite well in the small town I grew up in as one of the better landscapers in the area. We were voted best in the area in the newspaper. I have developed a professional relationship with the city manager, mayor, and treasurer, as well as school superintendent and business director. The town is currently on a 2.4 million dollar per year tax income budget, with a WalMart being built expecting to bring an additional 2.9 million per year in sales tax, so they will be spending some money. And the school district has just received a $93 million bond to renovate and rebuild schools. I'm being blessed because so far I have been the only one to turn in bids on 5 projects for the city and schools, LOL.

I do understand the frustration in this crap though, and there honestly is really no end to it. There never will be. It's basically impossible to win these municipal bids. Whats ridiculous is that a city can receive bids once annually and they might receive 10 bids. Five of those will be the lowest cost, and they will ALL either be brand new businesses, or ones trying to get anything they can because they are struggling (usually new businesses anyway) and then there will be the other 5 bidders who are the highest, who have been submitting the same type of bid for the last 10 years. And the city will always go with the lowest price, because they have to. It just seems like there could be some sort of rule to where they could ignore certain bids for some reason. I guess this is the reason that many municipal bids require being bonded. Usually the new guys aren't. However, in Oklahoma, you only have to be bonded if your BID comes out to be over $50,000.

I think wise thing to do (which I have advised my local town to do) is for the city to hire a trusted consultant to prepare an estimate for the city to know what a legitimate company would be charging for this. The city pays the consultant for their time, and the consultant gives the city a detailed site plan, and specifics on exactly what needs to be done. The city then provides the bidders with this information, and the bidders will submit a bid. This also is convenient for the bidder as there may not be as much "free consulting" work going on. Though I would review the site anyway personally.

A Leaf Above
03-06-2012, 06:43 AM
Well dont even bother bidding for a county contract here in broward county seeing how i am a white male ...They go by a 100 point system and the minorities (which i should be now) get 10 points right off the bat for being minorities ...The highest i can get is a 90 of 100 points on the scale ..So im at a disadvantage right off the bat ....At least some of you actually have a chance ..