Perfect Example Of Commercial Bidding...The Wrong Way

Discussion in 'Lawn Mowing' started by MMLawn, Jan 30, 2006.

  1. MMLawn

    MMLawn LawnSite Gold Member
    Messages: 3,569

    Okay, here is a perfect example of what I was talking about in my prior thread on folks getting into the green industry and bidding on commercial projects without having a clue as to their cost.

    This was a contract that I decided at the last minute to bid on a couple weeks ago as I really didn't care in the beginning about bidding on it. The results I SWEAR to you are the exact numbers.

    This is a "low bid" contract, assuming that the "low bidders" references check out okay.

    This bid was open today. The bid will be overseen by a State licensed engineer and inspected weelky by a licensed landscape contractor, who the winning LCO must also report each weeks work to. It is comprised of two commercial sites, 6 miles apart. The amounts of levels of service for both properties are total as follows. Total turf to be cut is 14.5 acres, 17,000 linear feet of edging of curbs and sidewalks, 220 yards of mulch supplied and installed, fertilizer at the rate of 2# of Nitrogen per 1K Sq ft, lime at the rate of 25# per 1K sq feet, overseed with approved fescue blend seed at 2# per 1K Sq ft, aeration once per year, labor only for seasonal plantings twice per year, pre-m and weed control for 29,000 sq feet of landscape beds, pruning of shrubs and smaller trees, fertilization of trees, and complete leaf clean up and removal (and there are around 110 trees on the property) weekly during Sept, Oct and Nov. This is also a year round contract.

    Other requirements: 1) $1,000,000.00 in Business GL Insurance, 2)$500,000.00 per vehicle of Commecial Auto Liability for each vehicle that will be on the property, 3) full Workers Comp coverage, 4) miniuim of 2 employees on site, except during leaf removal which requires a min of 3 employees, 5) 7% Bond must be also paid to the client during the 1 year contract to ensure the work is completed. 6) Must already be State Licenses Applicator.

    Keep in mind also that the specs for the grass seed and fert are engineer spec required and at this point only the bigger name professional suppliers such as Lesco, Anderson, etc stock the required materials. Now, MY cost on materials alone for this job NOT including equipment and other related cost, only mulch, fert, seed, lime is around $8,000.00 and I get it cheaper than a lot of other guys because of the amount I buy during the year.

    The bids turned out as follows going from high to low: (Mine has an * by it.)

    10) $240,000.00

    9) $171,900.00

    8) $96,480.00

    7) $92,800.00

    6) 85,300.00

    5) $55,112.00*

    4) $50,713.00

    3) $47,700.00

    2) $29,999.00

    and the Winner is:

    1) $10,000.00 :dizzy:

    So, all you young guys posting about wanting to get into Commercial, this is what you will deal with.
  2. Green-Pro

    Green-Pro LawnSite Bronze Member
    Messages: 1,420

    This is a big reason as to why I have elected to focus on residential clients. I plan to retain the commercial accounts I do have if possible, I will also not turn any down that request us for service. However I will not actively pursue them. Another example: We are finishing out the last year of a contract on a State National Guard property, we took this over last year, we did not bid this one. Total turf is only 2.5 acres + or -. Lots of trees to trim around, have to get someone to unlock the gate to get inside a small area of compound to mow. This is just a mow and trim each week with a 24 times of service per year contract. Takes two guys on Scags roughly 2 - 2 1/2 hours to complete, total take averages out to about $70, thats it.
    This does not include the add-ons as in Mike's example, but when taking into account employee wages, business ins, work comp., equipment and the fuel, oil, gas, filters, etc. to run them, time spent there, vehicle cost to get there, time to get there, etc. plainly we are not making squat on this account.

    Like I said we did not bid but are finishing out the last year on this contract, it will be up for bid again end of 2006 season. I will bid it but only what I can factually bid based upon our numbers, IMO if somebody wants to do this prop for $60 a pop or so, have at it.

    On a side note we have done an excellent job providing service and have been complimented by the inspector several times. One reason I elected to finish the contract out for another company was:
    High visibility location; we get noticed by many, many people.

    The chance to bid again, and who knows, actually service this location for a decent amount.

    Great thread Mike, guys & gals should be aware of the potential pit falls of commercial accounts

    P.S. This is not to say we don't make good money from our other commercial accounts though.
  3. Del9175

    Del9175 LawnSite Senior Member
    Messages: 352

    Wow. Maybe he bid low because he couldn't afford to pay any more than the $700 bond. This joker is going to lose his shorts on this one.
  4. TScapes

    TScapes LawnSite Senior Member
    Messages: 452

    Great Post! I have seen this one too many times.

    One would think that these type of companies would learn their lesson, but then you always seem to have others that pop out from the woodwork and do the same thing. They simply look at the $$$$ and see what they are going to get for the work, not taking into account their costs to produce the work.
  5. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Messages: 3,065

    Then he has NO BUSINESS even bidding on a property this size PERIOD!:nono: :realmad:
  6. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Messages: 3,065

    I am taking the route of Green Pro, You guys can have all of this commercial B.S.! Take it keep it. I would much rather spend a total of 30 minutes estimating a good residential customer than to spend hours wasting my time on crap like this. I recently submitted a letter to a realestate company asking to be put onto their bidding list last year. Well I got the specs again for this year, they were to the point but its the same stupid places I bid on last year and if 17.89 was "was too high for our consideration" for a 3-5k sq ft lawn then go find the next sucker. Have at it low ballers:waving:
  7. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    Well, I absolutely get your point of this thread.
    But frankly, I don't think you have much room to talk.

    #6-#10 are saying the same thing about you my friend.
  8. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Messages: 3,065

  9. MysticLandscape

    MysticLandscape LawnSite Bronze Member
    Messages: 1,020

    Now i have only been in the business for a little over a year now, i have never even submitted a bid or even looked at commercial property. Ill just say that however won that bid will pro pay over 10k alone in expenses throughout the year. Ill just guess and say if i was to put a bid in, it would be around 130k-140k. Thats just my opinion
  10. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    Yeah, I see his point, see it all the time, more often than I want, ect.
    Do I complain about it too? Yes, without question, there are plenty of morons out there.

    But go back and look at the specs for this job.
    He bid $55,112 himself.

    So I was just pointing out that my opinion is that, yes the 10K guy is totally clueless. But at his bid of $55K for all that, he doesn't have a lot of room to talk himself.

    Not blasting anyone, just sharing an opinion, and we all know how that saying goes. :laugh:

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