Tender pricing

[Thesnarlingbadger]

Hi guys,

 

Looking for a bit of ice here on the price the tender is set at and the actual price it comes in at. I’ve been looking at a small tender, a few sites and all ADB road side stuff. I won’t go in to the exact details but we are a small firm with a couple of teams out most days 2 chippers 2 transits and a pickup and trailer so no major kit (although that’s the dream/aim). I have looked at a few of the sites on this tender and am already thinking the price I am going to slap on at the end is going to be almost double what they are expecting.

 

I’m just looking for a little bit of advise as to how close to expected price you are meant to be?

 

I spoke to another chap who has a larger business today while I was out looking at a site who said he had been running 30 years and has looked at half the sites and was going to come in at twice if not 3 times the amount they are expecting and he had 40 off guys working for him and all the kit to deal with the work (Tractors, MEWPS, 360 diggers etc). He seemed like a really genuine bloke and said to put in a price and see what comes back.

 

I have no idea how myself or a larger firm could possible come in at the price the client is expecting? Am I missing something because I’m looking at throwing 6 guys at this for the best part of 5 months work, with MEWP hire and tractor grab and timber trailer borrow but am still expecting he price to be at least double.

 

I just want to know if larger Irma can come in much cheaper than me or have I missed something? There are around 1000 trees in total and are mainly road side with roads that can’t be closed, power line shut downs and a fair amount requiring MEWPS.

 

Not out of my depth with the work involved but thinking there is no way it can be done at the expecting cost

 

Thanks for you help as always

[Mark Bolam]

That’s not a tender.

Do you mean they’ve set a budget?

 

They can’t say ‘how much are you going to charge us for £90k’s worth of work?’

 

I’m obviously missing something.

[Mick Dempsey]

No real experience to offer of the pricing, but I saw an multiple ADB roadside removal  job being done on FB near my old village and they were using big 360s with grabs, pto chippers with silage trailers for the chip, in other words big boys with big toys.
 

You can’t compete with these firms without serious investment.

[Joe Newton]

Their budget is irrelevant to you. Don't make the mistake of "winning" unprofitable work.

 

Suss out how long it'll take you with whatever kit you need and put a good enough amount on for contingency and profit.

[Sutton]

We're south of you on the Londond-Brizzol M4 corridor and still get the "it's not what you know nor who you know but what you know about who you know!"

 

Sometimes the committee deciding on tenders are looking at more than the bottom line.

It's been said before and I'm sure it's been said many times on here before, but some, and I mean "some", never go for the cheapest quote.

 

Good Luck :)

[waterbuoy]

We deal with tenders in a different sector for a variety of different sized contracts.  Experience suggests that the larger the outfit the larger the pro-rata rate as they have significantly more overheads to cover, even if they pay their staff peanuts.

 

We have had cowboys come in cheap as chips, and they have then managed to get the value of the contract raised after realising they were out of their depth.  However, this was the EA and all their staff in procurement seem to want an easy life - there can be no guarantee that it will be same on other contracts.

 

The most important bit of advice I can give is don't be tempted to bid low as you may end up working your butt off for 5 months to the benefit of the customer whilst others are all out picking up more lucrative jobs.  The job has to make financial sense to you, else it is not worth doing.

 

 

[JLA1990]

Depends on your approach/kit, like Mick says if you have the right plant you can complete the jobs in half the time bringing labour costs down dramatically. If you have experience with the kit there are plenty of companies hiring 360s, shears, tractors, trailers etc. However like Joe says if you want to do it your way, price it your way! 

[dumper]

Don’t fall into the trap of pricing to win the work, put in a rate you are comfortable with always add a little bit more if someone wants to do it cheap let them, 5 months work you will have more than one unproductive day ignore the guide price could be years out of date 

[Dan Maynard]

Also factor in what will happen to your other normal stream of work, is this going to make it difficult to keep up with your regular customers?

 

At my last firm we had the chance for a couple of big contracts promising super profits, made for super size problems when they didn't go well including one customer that went bust.

[Will C]

Don’t forget your bread n butter jobs, if you lose your regular work for a big job it will cost you dear in the long term. Price strong and smile if you get it and don't stress if you don’t.
You can sit on your arse and earn nowt so no need to price low to have a big head ache to earn nowt!