A 2008 Bidding Story

Here's a scary tale I hope readers don't have to face this year. I learned about it through a phone call from the contractor, who really couldn't believe the decision his customer had made. A contractor bidding a 2-inch overlay job on a parking lot showed up to present his bid and make his pitch -- normally a straightforward situation given the contractor had been maintaining the parking lot since 1996. But this year when he showed up to present his bid to the board he was confronted with three additional bids. "Normally there is only one, and often not even that," he told me. Okay, maybe that's to be expected in this economy. What happened next was not only unexpected, it was ridiculous. Bids were presented and they were $300,000; $310,000; $325,000...and $125,000. Guess which bid got the job. "I tried to tell the board, the people who had been doing business with me since 1996, that no contractor could do that job at the required specs for $125,000," he told me. "I even worked through the math on how to calculate mix tonnage and multiplied it by my current cost for hot mix just to show them." What his math showed is the winning contractor can't even come close to buying enough mix to complete the job for $125,000. But the board couldn't see past the low-ball number. "They're going to end up with an awful lot of change orders to get the price up where it needs to be, or they're going to get an inferior job with maybe an inch of hot mix instead of the two inches they specified," he says. "It was a bad decision on their part but they just couldn't see past that figure." While the contractor isn't happy with the outcome, he didn't want the job at that price. Instead, he's a month out on work that will be profitable for his company, and he's waiting on decisions on dozens of bids he has outstanding. "People seem to be taking a little longer to award jobs, and maybe that has something to do with the weather," he says. "But we figure we're going to get our share once they start making decisions and it won't be long before we're two to three months out like we normally are."