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Bunton Guy
11-14-2004, 12:20 PM
The airport in my area ' charlotte douglas international ' had bid out their landscape maintenance contract to 3 companies 2 being national and one being close to national size. The contract was stated that the new service provider had to provide 9 workers and 1 supervisor at all times for all work to be done outside of the privacy fenced areas. Im not sure just how many acres it is that the contract has to be maintained but there is no material furnshied by the LCO. All materials are to be bought by the airport and put down by the landscaper. Keep in mind these prices are for the all 3 years of this 3 year contract.

TruGreen-Land Care $683,923
Valley Crest $1,305,000
The Budd Group $1,467,936

Contract awarded to low bidder. (TruGreen)
Last 3 years of maintenance where done by The Budd Group a large janitorial and landscape management company.

Council meeting:

harkey: How does Budd's bid this time compare with what we have been paying them?

Orr: It is less than 10% more than what we paid them last year.

Randolph: Is this just service or does it include materials?

Matthews: Are they bonded for this?

Orr: Yes

Orr: NO, it does not include trees or anything like that but it does include pine straw, mulch and fertilizer.

Gilreath: Is it unusual to have this much difference in the low and high bidders?

Orr: Is is highly unusual. IT usually indicates a severe problem. This is a service contract. We can cancel the contract with or without cause in 30 days notice. So if they don't do what they need to do, then we will simply cancel the contract with them.

Orr: Clearly this is a very aggressive bid but is clearly a very high profile contractor. Your trucks and your equipment is sitting around here all day everyday and millions and millions of people see it.



Just thought you guys would LOVE to see how TruGreen can bid nearly HALF of what other large national competitors can.

I personally had bumped into them on 2 bids and they closed on both.

One residential I bid $187.00 a month to maintain this small 1/4 acre lawn 12 month contract. They bid $145.00

On a commercial national chain store. I had put a bid in for $12,000 a year for just landscape maintenance....they put in a really nice bid of $6,200.00
WOW gotta love a money hungry...over promise under deliver kinda company right?

Envy Lawn Service
11-14-2004, 12:55 PM
Simply horrifying!!!
Can't understand why they would want to leave that much on the table.
Destructive to our industry!

Bunton Guy
11-14-2004, 01:23 PM
Just think of it...they could have bid 1,100,000.00 and got the contract....+ they would make an extra 500,000+ OVER what they bid!???? STUPID EH?

syzer
11-14-2004, 04:03 PM
Yeah its pretty amazing how they hurt both themselves and others and dont even worry about it. Thats just one contract. Think of how much money across the board they are losing nationwide.

Upsetting to say the least.

Travis Followell
11-14-2004, 04:05 PM
Thats very sad the way that company works.

paponte
11-14-2004, 04:15 PM
Yeah but you know what? They are still in I believe the top 3, on the top 10 wealthiest lawn service company list. I will have to double check to verify that, but it's definitely in the top 5. They've got to be doing something right. ;)

syzer
11-14-2004, 04:17 PM
Yeah but you know what? They are still in I believe the top 3, on the top 10 wealthiest lawn service company list. I will have to double check to verify that, but it's definitely in the top 5. They've got to be doing something right. ;)

Only because of their size. Think of where they would be on that list if they didnt cut themselves so short on the contracts.

Envy Lawn Service
11-14-2004, 04:21 PM
Only because of their size. Think of where they would be on that list if they didnt cut themselves so short on the contracts.

Now that's getting to the point!!!

And I bet they would still be very close to the same size, while being wealthier.

paponte
11-14-2004, 04:26 PM
Only because of their size.

Whats the difference? You have to encounter wealth in order to grow. Not that I am agreeing with the bid at 1/2 price, but there has to be a reason for it. A company of that size does more volume than most could ever dream about. Volume = buying power = reduced prices = more discount handed to the consumer.

All that I am saying is that there has to be a reason behind it. A company of that size doesn't have little Timmy shooting out bids of that nature. :)

ALarsh
11-14-2004, 04:39 PM
Yeah but you know what? They are still in I believe the top 3, on the top 10 wealthiest lawn service company list. I will have to double check to verify that, but it's definitely in the top 5. They've got to be doing something right. ;)

TruGreen is number one according to Landscape Management magazine, July 2004 edition. A few specs about their operation, headquarters in Memphis, TN; 300 branches and Franchises; 25,000 employees; $1.4 Billion in revenues; 30 years in the business; Don Kames is the President; they do 30% "maintenance", 65% "Lawn care", and 5% "other". Number two on the list of the largest LCO is ValleyCrest Cos. and TruGreen is beating them by $725 million in revenue.

Just a little bit of information about TruGreen. :drinkup:

kootoomootoo
11-14-2004, 05:30 PM
Dont worry....the landcare execs ( I butted heads with a few) will be sugar coating the fact they got a sale. They will worry about the profit issue at the end of the year. These same execs will moan about underinflated tires or leaving too many friggin lights on the office yet leaving 1/2 a mill on the table is ok.

Envy Lawn Service
11-14-2004, 09:59 PM
Dont worry....the landcare execs ( I butted heads with a few) will be sugar coating the fact they got a sale. They will worry about the profit issue at the end of the year. These same execs will moan about underinflated tires or leaving too many friggin lights on the office yet leaving 1/2 a mill on the table is ok.

Ohhh Yeah!!! Now that's a classic!!!! :cool2:

That's exactly right because there is a world of difference between revenues and profits. This company's profits are few and it's numbers are many. I feel sorry for the poor basterds that are trusted with the task of keeping the train wreck they created from de-railing.

specialtylc
11-15-2004, 06:25 PM
Thats the exact same results we had at our airport bid. First year Tru green was more than double everyone elses bid. The next year they came in at half of everyone elses. It is now there contract every year as most of the LCO in this area dont even bother to bid on it any more.

Mark McC
11-15-2004, 06:33 PM
Sometimes a company that size can bid a job like that as a loss to offset other profitable operations under the corporate umbrella. I guess they figure to make it up somehow, perhaps in visibility. Might also be a "turf war," literally, like gas stations duking it out on gasoline prices.

I'm sitting here thinking that if Valley Crest can't hit these guys, I'll just stick with residential and small commercial as my business grows. Thank God there's still room for little bottom feeders like me.

I have to question whether Tru-Green's bid allows any profits. True that they have purchasing power out the wazoo, but that much? I really doubt it. That's why I think they're taking a loss on that job. It's really not uncommon at all among the Fortune 500 crowd to do something like that.

Lazer_Z
11-15-2004, 06:43 PM
Guys, I have a question have you ever heard of anyone every trying to lo-ball TGCL to get a job?? To me it does not seem possible but, I don't do any fert work so I would not know.

Tharrell
11-15-2004, 08:20 PM
Pity the poor guys who have to make that one work. The guys in the field always pay the price for an idiot salesman

GreenMonster
11-16-2004, 07:41 PM
Pity the poor guys who have to make that one work. The guys in the field always pay the price for an idiot salesman

A MEN.

Leaving that much money on the table is a crime. Unfortunately, the small-timers do it to. A wrote in a different thread about the results of a city retaining wall bid, one rebuild, one install. I came in third at roughly 22k, second came in only a few hundred under me. Winner came in 7k less than.

7k left on the table my a small-time op :rolleyes: . Hurts us all.

JimLewis
11-17-2004, 02:24 AM
I honestly think that this problem could be minimized if we all insisted on giving DETAILED bids for any work we did. For instance, when bidding a retaining wall job;

2,450 "Manor Stone" bricks from Mutual Materials = 5855.50
6 yards of crushed gravel to be used for base = $120.00
120' drainage pipe with geotextile fabric sock = $80.00
5 units of soil to be used for backfill = $1500.00
Labor to install wall. 3 men @ $40 per man hour x 40 hours. 4 10 hour days. = $4800.00
Incidentals = $400.00
Profit = $2000.00
---------------------
Total Job = $14755.50

THEN, tell the customer this,

"Now you are probably getting some more bids or may have already done so. The total price from one bid to another may vary wildly. THAT'S why I have spelled everything out for you. I've been doing this for 10 years and I know exactly how long it will take us to contruct your retaining wall correctly. I know my labor hours are right on the money. So keep this in mind when comparing bids; First, insist that every company break down their bid just as I did. Otherwise, you're comparing apples to oranges. This is a big investment for you. And you want to make sure that the contractor you hire is thinking of everything.

If someone comes in with a bid significantly lower than our bid, I'd be skeptical. What is their labor rate? What is their estimated time for this job? What are their materials costs? Chances are he's drastically underestimating something or he's taking a shortcut. If you want it done correctly, his material list should AT LEAST have the same materials as I listed above.

Now, on the other hand, if someone comes in with prices higher than ours, again, find out why. Insist on a breakdown. They may well be over-estimating or adding in things that aren't necessary. Or they may just have a higher profit margin that they don't want you to see.

Either way, I hope we can earn your business. But I know it's difficult chosing who to spend your money on. By providing a detailed bid, we're hoping to make this process easier on you. We hope you'll chose our company. But even if not, this will help you make a more informed decision.

Oh, and one last thing; here's a list of 40 references for people we've done similar work for over the past 12 months. Feel free to call any one of them and get a reference for us. Some companies may give you 2 or 3 references. But I like to give out a lot more. Because NOBODY has that many friends and relatives. Have a nice day."

I think it is wise to always do a large bid this way. If we all did our larger bids like this, we'd probably land half of the jobs just because you impressed the hell out of them so much. And you'd win another 25% because yours was the most detailed bid of all. Only when a customer can compare different bids on a level playing field will they be able to make an informed choice.

That's my 2 cents, anyway.

MacLawnCo
11-17-2004, 01:25 PM
Only because of their size. Think of where they would be on that list if they didnt cut themselves so short on the contracts.
If they didnt low ball then they wouldnt be the size they are now. Bid price and size of corp are essentially inverses. TGLC knows exactly what they are doing. Could perhaps they be more effecient? Are they bidding this job without profit? With 25000 employees, taking no profit on 10 of them isnt going to put TGLC into bankrupcy court. Did anyone know accountants are very creative? How about bidding this job at a loss, but calling the sum of the loss and profit an advertising expense? hmm...

lsylvain
11-17-2004, 02:12 PM
It is really amazing what economies of scale can do to your cost. To the small guy it looks like they are giving up 500k in profit, but chances are they are earning just as much if not more profit on that job than the other 2 bidders. Just look at wal-mart, the 16th largest organization in the world. They didn't get their by just marking up their products by a % they cut cost at every step of the way so they can sell you a can a peas for .39 compared to Krogers .59

lsylvain
11-17-2004, 02:22 PM
Also, if you don't have to actaully do the work your self. an extra $1 is an extra $1. If you have a million contracts that earn you $1 in profit each you have got a million dollars profit per year.

Envy Lawn Service
11-17-2004, 09:52 PM
Jim Lewis,

You're the man, and I'm glad you are not one of my competitors! Over the years, I learned the hard way by trial and error. I give a very similar detailed bid and sales pitch on all detailed jobs. I just do not disclose my profit.

How well does it work for me? Well, it works better than my previous methods. I've been signed on the spot a few times right after an effective presentation, while other times the impact didn't amount to a hill of beans... you know the type, where dropping off an envelope would have been just as effective.

The main benefit for me has been better quality customers overall.

HOOLIE
11-17-2004, 11:24 PM
I could see on a retaining wall project that the customer would want it done right for safety/liability reasons, but for just mowing vast acreage at the airport, they're gonna go with the lowest bid.

They should do it like at the Olympics with skating & gymnastics, throw out the high & low prices...

tiedeman
11-17-2004, 11:37 PM
that is an amazingly huge difference in bids

JimLewis
11-18-2004, 04:05 AM
I give a very similar detailed bid and sales pitch on all detailed jobs. I just do not disclose my profit.

I hear ya. That's a tough one to disclose. And you should realize that you don't have to. You can just as easily hide profit inside the labor figure. Instead of $40 per hour for labor, you can just make it $60 per hour or whatever. Then, it's more difficult for the customer to figure out your profit. And of course, profit is also hidden in marked up items too. For instance, I sell every plant I buy for twice as much as I got it for. I mark up irrigation stuff 20%. Retaining wall materials, mulch, soil, etc. 20% too. So there's a lot of hidden profit that you can use.

JimLewis
11-18-2004, 04:17 AM
I could see on a retaining wall project that the customer would want it done right for safety/liability reasons, but for just mowing vast acreage at the airport, they're gonna go with the lowest bid.

I am not so sure I agree. If you read the original post, it's clear that the committee was even amazed at the difference in price. I think they were looking for reasons NOT to take the lowest bid. But nobody gave them any reasons. All someone would have had to do is say something like, "We may be a little higher, but here's why and here's what you'll get for that extra $$.". Had one of the higher bidders laid out a clear and consise point-by-point list of why they should be chosen over their competitors, they may very well have landed the bid.

walker-talker
11-18-2004, 04:48 AM
Guys, I have a question have you ever heard of anyone every trying to lo-ball TGCL to get a job?? To me it does not seem possible but, I don't do any fert work so I would not know.
No, but I have mathed their price and wont do that again. Keep in mind this is my second year in the pesticide business and still learning. Trugreen had been doing a particular lawn for $37.50....so I (without figuring cost) told the lady I would match it.....lesson learned. Since I have came up with a pricing structure and tell the lady next year it's going to be X.XX amount. I am sure she will drop me, but better that than cut my profits. I am sure Trugreen is paying less for materials than what I am and that may have something to do with it.

Planter
11-18-2004, 12:18 PM
From my prospective, TG will make a profit on the job. The job will look ok, but not the best. I saw an interesting quote once, maybe here, that went something like this:
Customer: Can you do the job for $100 less than your bid?
Contractor: Sure, but I'm going to make the same profit either way. I have to, to stay in business. I'll do the job for $100 less, make the same profit and you will never know the difference. Only I will know where I cut the corners. Now which job do you want me to do?

Guess that's how some companies operate.