While there has been modest growth in the construction industry, it remains extremely competitive and deserves its reputation as a “dog-eat-dog” way to make a living. The continued practice of awarding contracts to low bidders reinforces this reputation but also, strangely enough, results in no long-term winners.
In our experience, it has become increasingly difficult to be the low bidder as a material supplier. Anyone can win a bid by submitting a low (but often unrealistic) price. The low bidder may not grasp the complete scope or may deliberately exclude scope from pricing to later increase the contract sum through change orders. Or, as a result of rough economic times, a supplier in survival mode may desperately seek any work for their shop and intentionally drive the low bid.
Many general contractors have learned the hard way that selecting the supplier with the lowest price may get them the job but not necessarily add to their bottom line. Alternatively, the general contractor who selects a supplier with a proven track record of good quality and service ultimately discovers that the bid is truly “firm”, matches scope of work and, therefore, is less expensive.
A quality vendor protects their reputation and that of the general contractor by telling the truth. This vendor will tell the general contractor what they need to hear, not what they want to hear. The vendor may point out that the requested delivery schedule is problematic and overly optimistic due to site conditions (what the contractor needs to hear) versus the low bidder agreeing to an unfeasible delivery schedule (what the contractor wants to hear). Reputations and esteem go down while costs go up when the low bidder misses the agreed schedule. This directly impacts the other trades involved. If a low bidder is replaced mid-stream with a better performing supplier, overall costs are higher than if the General Contractor had selected the quality vendor in the first place.
For Macuch Steel Products, Inc. and our Family of Steel, low-bidding is not part of our strategy. Our strategy is long-term growth built on a practice of providing realistic prices for high quality services and products. Our diligence to protect our reputation will, in turn, protect yours.
Macuch Steel Products, Inc.