Heritage Restoration, Inc.

How to Pick the Right Bid

Invitations for Bid (IFB), or basically asking multiple firms for a bid, based solely on price are bad. The trouble with a priced based IFB is while you may have the most detailed specifications and drawings, you have no idea if the bidders are actually qualified to do the work. And when you do not have any specifications or drawings, you are leaving it up to their interpretation of what you want, or the building needs. The cheapest price does not always mean they are the most efficient and cost competitive company out there. It could mean they forgot something, hire cheap or unskilled labor, or they are looking for ways to submit change orders, or even worse they mess up the project or building.Plans and Specs

The bidding process can lure those who find the cheapest labor and best ways to manipulate a job in their favor. Missing items, change orders, or completing tasks that cut essential steps out are common ways to start off low. Request for Qualifications (RFQ), or prescreening firms, allow companies to compete in making the grade from past performance and general business health. Once firms are accepted in the RFQ, they can then compete in a low bid IFB.

Requests for Proposals (RFP) start by allowing companies to present their best approach, grading them on the best presentation. A RFP is the first step leading towards an award of a contract, where other steps, such as evaluation of criteria for technical and cost factors, can select a company based on a broader range than just price.

Yet few homeowners can afford such arduous methods of finding a contractor. What homeowners really want is the lowest bidder getting the job done right, exactly as they thought, without hassles, and without surprises.

A colleague recently posted a blog about a brilliant alternative called the Request for Collaboration (RFC). David Barista of Building Design and Construction Magazine highlighted a Seattle developer that was frustrated with the traditional RFP process requiring volumes of paperwork that did not result with the best-paired project partner. The developer used a RFC method where competing firms had three weeks to prove their ability to collaborate, think on their feet, and come up with the most comprehensive project plan.

The concept of the RFC can be adapted for a project of any size. Once firms are isolated based on experience, depth of skills, and ability to successfully perform a project, a client can have a firm complete smaller projects to determine their competence. I have always appreciated clients that test us with smaller projects. Compensating a firm for smaller projects, or even for a RFC, allows them to focus on a client and prove their skills and management ability, which is more important than who looks good on paper.

Too often we pick contractors based on a presentation, appearance, and price, when a successful project really requires skill, longevity, and the end price, none of which was known during the vetting process. As a general contractor, we have the ability to test firms and individuals over multiple projects, finding what projects their skills fit best. Yet the homeowner may have only one opportunity to discover if a contractor is worth the price both in quality and cost. Some of the best craftspeople are the most unorganized and poorly presented business people, but they certainly make it up in their work.

So now that the warmer weather is upon us and we stare at our houses trying to figure out what to have done or who to hire, think about testing the contractors you feel good about, not just the ones who are the cheapest, flashiest, or talk a good game. You wallet and house deserve better.