Midnight at the North Pole

Midnight at the North Pole

Tuesday, July 19, 2011

Successful Contractors Recognize Systems

Contracting can be a good business or a bad business!  The thing that separates a good business from a bad business is whether you run the business or it runs you.  I think we all agree that you need to run the business and to do this you need to recognize that the business is composed of a number of systems.

The systems that are involved include:
                1.  Project Procurement systems.
                2.  Marketing systems.
                3.  Take-off systems.
                4.  Bidding systems.
                5.  Office managerial systems.
                6.   Record keeping systems.
                7.   Billing Systems.
                8.  Collecting systems.
                9.  Etc …..
These are just a few of the systems that are involved in running a successful contracting company.  If you really review the processes involved in running your business you can see that there are a lot more that needs to be added to my list.

I believe in breaking down each process into a system and you need to fine line how you approach each task.  My reason for breaking each process into a different system is because once you identify each process into a system then you can develop an acceptable way that you want to have each process performed.

After you develop each system then you can teach every new employee how you expect that particular event to be accomplished.

This is basically the same procedure that McDonalds uses to run their different franchises.  They developed a system for running the business and use the systems to cook hamburgers, French fries and every other item on their menu.  Every item has a system!

I will explain my line of thinking in upcoming articles.

Thursday, May 26, 2011

SUCCESSFUL BIDDING TIP

Know what you are bidding when you bid on a project.  You should only bid on what the project specifications and the scope of work calls out to be completed during the construction process.  Do not read more into the project even though you know that you have a better approach to completing the project at a cheaper cost.

Read the specifications thoroughly and make sure you and your bidding team understand what the architect and engineers are trying to accomplish with the project.  If there are any questions they should be addressed with a written request for clarification.  Your question needs to be made public so your competition is aware of the potential issue that can affect the cost.

Plan to provide what the project plans and specifications specify; no more and no less!

I know of several projects that were lost because subcontractors inserted a cost to do the job right because they thought that the architect and engineer had incorrectly specified the desired equipment.  Any corrections or changes should be addressed by a change order if the issue is approached after the project award.

I would like to share a true story from one of my contracting friends.     

Once upon a time there was a large project in Northern Arizona that was going to be built after a competitive bidding process.  The project consisted of building a new daycare center and the bid documents package was huge with many pages of specifications and rolls of blue prints.  There was a mandatory pre-bid meeting which meant that if you did not have a representative at the meeting you would not be permitted to submit a bid proposal.

All of the competing contractors had a representative at the meeting and since my friend could not attend, he sent one of his employees to attend as his representative.

The project had a large kitchen that was meant to be a part of the building and the intent of the Architect and owner was to have the equipment installed.  They even included a set of blue prints that documented the location of the different pieces of equipment.

During the pre-bid meeting the Architect told all the attending contractors to make sure they had the kitchen equipment included in their bid proposal.

When my friend received the bid documents and read the project specifications and he reviewed the project blue prints.  He remarked that they were indeed a nice set of blue prints and bid specifications.  He noticed something during his review that he did not share with anybody else.

On the day of the bid my friend was the low bidder by approximately thirty thousand dollars.  Everybody assumed that he had not included all the necessary items for a complete bid and upon further investigation it was discovered he had not included the kitchen equipment.  The architect and owner’s immediate response was to disqualify my friend’s bid proposal, however, he responded that it was their mistake and they would have to accept his bid proposal or the issue would have to be resolved in court.

Reviewing the bid documents during a meeting about the situation my friend pointed out that there was no specification section for the kitchen equipment.  My friend told them that if there was no documentation showing what brand was needed to be installed and he assumed that they did not want the contractor to provide the kitchen equipment.  In addition since there was a specific set of blue prints for the equipment that was drawn by a kitchen equipment company and it appeared that there would be a separate contract to the kitchen equipment company.  My friend had submitted his proposal exactly as documented in the bid documents!

After the owner’s attorney review and the owner’s board of directors; it was decided that my friend was the only one that read the bid documents correctly.  He and his company was awarded the contract.

By reading the bid documents and analyzing the information; my friend found an edge to the project that nobody else saw.  The architect and project officer had not reviewed the bid documents thoroughly and, while their intent was to include the kitchen equipment, the bid documents did not reflect their intent.  

I suggest that if you are serious about being successful; you need to cultivate the art of reading.  The truly successful people are always searching for new useful information and most good information is found in written documents.  You rarely find useful informative material on television.