City Contract ?'s

Discussion in 'Lawn Mowing' started by DanG, Feb 23, 2001.

  1. DanG

    DanG LawnSite Member
    Posts: 234

    I'm thinking of bidding on a city contract but I'm not sure of a couple of things.

    They want a performance bond for one section for 100% of the successful bid.
    How does that work? Where do you get them? How much do they cost ?

    Also they hold back 10% of each monthly bill you send them to the end of the contract(3yrs)Have you had this happen to you?

    They also schedule the day you mow each property, and what times you can mow them, 7am-7pm M-F or 10am-7pm on sat.

    Also all clippings(lawn and hedges) have to be removed from site and all trash in lawns taken away(these are housing projects)

    It seems like more hassle then it's worth if you have other contracts that have to be done.

    Do alot of towns/cities work like this?

    Thanks,

    Dan
     
  2. Dan wrote:

    >They also schedule the day you mow each property, and what times you can mow them, 7am-7pm M-F or 10am-7pm on sat.

    They can't do that to a contractor. If they do that you are considered an employee and you should be recv. bennys, workmans comp, and they will have to match your fica taxes.
     
  3. Green Finger

    Green Finger LawnSite Senior Member
    Posts: 839

    Performance bonds.

    You will get a bond for the amount of the contract. example if the contract is worth 100K, If you default or fail to perform on the contract. They will fire you. Go to your bond company and collect the remaining amount left on the contract. Use that money to hire another company. It's designed to "protect them from fly by night companys". I don't always agree. But they figure if you are reliable why not?

    You get the bonds from your insurance agent. Who ever you have general liability from. They can assist you.

    Cutting times.
    Yes they can do that. They have laws and ordinances in the city as to when you can do what. Mowing falls under that. What you can do is talk to the contract manager and inform him of your schedule. Most of time they will agree with you.

    Advice
    When dealing with government work, communication is the key. Give the contract officer your cell phone number. Only have him deal with you. (or who ever calls the shots.)

    Government work can be a good avenue. But you must be able to manage your cash flow for payroll. Don't go on a spending spree, try to use your residential income to pay for everything. Because on the first invoice it might be late.(30 days or 45 days) Find out how are you going to get paid. Try to get it electronically posted to your account.

    But remember communication is the key. Do good work and manage properly and you can grow.

     
  4. Green Finger

    Green Finger LawnSite Senior Member
    Posts: 839

    Oh I forgot, How much they cost?

    It depends on the amount of the contract, how long you been in business, and sometimes your financials.

    You will put up a percentage of the contract for the total bond amount.

    Example 100K contract they may want between 2%-10%. Not sure.
     
  5. DanG

    DanG LawnSite Member
    Posts: 234

    Thats different then the so called "performance bond" that the one cemetery I maintain does.
    They withhold $1000.00 from the first check which you get back at the end of the season if the work you do is OK with them( I've never had a problem sofar & going on 4yrs with them)

    Also in looking it over they also want within 10 days of the award of contract "a executed Payment Bond or 100% of the successful bid as surety for the payment of all persons performing labor or furnishing materials in connection therewith"
    If I take that right if I bid $50,000 I'd have to either come up with all of it or come up with atleast some of it then for the portion to buy the bonds?And then have to buy the performance one on top of it....

    That makes it tough for the guys like me(mid-sized) to bid on these jobs because we don't have the money to purchase the bonds lying around and the cost of them would not be recovered till after the 1st couple of months atleast.

    BTW....

    The "Request For Proposal- Lawn Maintenance" they've put out is 37 pages long.

    And spells out EVERYTHING.....


    Hours of operation is on page 8

    Maybe NYS is different then where you live/work?

    Thanks,

    Dan
     
  6. DanG

    DanG LawnSite Member
    Posts: 234

    Thats different then the so called "performance bond" that the one cemetery I maintain does.
    They withhold $1000.00 from the first check which you get back at the end of the season if the work you do is OK with them( I've never had a problem sofar & going on 4yrs with them)

    Also in looking it over they also want within 10 days of the award of contract "a executed Payment Bond or 100% of the successful bid as surety for the payment of all persons performing labor or furnishing materials in connection therewith"
    If I take that right if I bid $50,000 I'd have to either come up with all of it or come up with atleast some of it then for the portion to buy the bonds?And then have to buy the performance one on top of it....

    That makes it tough for the guys like me(mid-sized) to bid on these jobs because we don't have the money to purchase the bonds lying around and the cost of them would not be recovered till after the 1st couple of months atleast.

    BTW....

    The "Request For Proposal- Lawn Maintenance" they've put out is 37 pages long.

    And spells out EVERYTHING.....


    Hours of operation is on page 8

    Maybe NYS is different then where you live/work?

    Thanks,

    Dan


    I just looked out side and it's snowing like heck :)
    maybe I'll get to plow after all....
     
  7. Dan these things are a waste of time. Only guys how can't get private sector work bid on these jobs. ALL BS NO Margin.

    You will get better returns buy doing direct mail postcards
    to hi end residential areas.

    Remember there is safety in numbers.

     
  8. Green Finger

    Green Finger LawnSite Senior Member
    Posts: 839

    If your bid is 50k, you will have to come up with a percentage of the 50k. Not the whole amount.

    The bond company will then issue you a certificate of bonding. It might be for 75k or 50k.

    That will cover the amount of the contract.

    Check in the yellow pages under insurance and ask about the contract performance bonds. Call as many as you can

    Go for it.
     
  9. Green Finger

    Green Finger LawnSite Senior Member
    Posts: 839

    Dan exactly,

    They set the standard to try and keep small business from competing. Millions of dollars go wasted in contracts, because the state, local, and federal gov. doesn't have enough "qualified small business contractors" to bid on these small business contracts.

    Then what happens? The big guys come in and bid. TruGreen, Brickman, Denison, etc.

    What has to happen is small contracts have to sometimes go for it. (If thats an area you want to go into)

    Money is Money. 50K in commercials is the same as 50K in residentials. It doesn't matter as long as it's in your bank account.

    We complain about seeing those guys on the front page of the trade magazines. It's because they bid on the big contacts and grow.

    If you can handle the work load of the contract. If your is your bid is profitable. (you are making a profit)

    Go for it.

    Why not?

    Don't forsake your residentials. They keep a steady cash flow. Balance it out.

    But if you can.

    GO FOR IT!
     

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