Beware Of Low Bidders

Beware Of Low Bidders

Dutton Plumbing specializes in service and repair work, often emergency situations, so most of the time we don’t get faced with competitive bids. But on occasion a customer will ask us to quote a remodeling project or complicated repair job, like a sewer replacement or re-piping, and then seek quotes from other companies as well. Depending on the situation, sometimes we’ll oblige, but we always warn that it’s unlikely we’ll be the low bidder. I’d like to explain why.

Competitive bidding for any kind of residential construction project is filled with uncertainties. We never know what we’re going to find once we start tearing up walls and floors to get at plumbing pipes, so it’s a roll of the dice trying to figure out how much to charge. Quote too low, we lose money. Quote too high, it will simply be a waste of time because a too-high quote won’t get the job.

You might point out that other companies routinely offer quotes for jobs filled with uncertainties. Yes, they do, and that leads me to some of the other pitfalls with competitive bidding.

Many contractors are quick to offer a lowball price in order to land a job, but then discover they miscalculated. Next thing you know, they ask you to pay for extras, or what’s known in the trade as a “change order.” Sometimes the customer may initiate a change, like deciding to upgrade fixtures. Other times a contractor will insist on it because he discovered something unexpected, like rotted wood, frayed wiring or other issues that must be addressed for the work to be done correctly and comply with codes. But beware. Unscrupulous contractors know how to play a lot of games with change orders. Procedures for handling change orders should be addressed in a written contract that spells out some of the conditions for which a change order might be needed.

Speaking of which, be sure you have a contract for any major project. Besides change order procedures, it should cover a detailed job description, cost and payment terms, start and completion dates; also, be sure any major home remodeling/repair contract specifies that the contractor will pull permits where necessary and show proof of insurance, licensing and bonding, as well as a termination clause that gives you the right to “fire” the contractor and seek restitution for damages, poor workmanship, failure to show up, etc.

A termination clause may also include reasons why a contractor might be justified to cease work for homeowner violations. Honest, qualified contractors will agree to such contracts because it protects them as well as you. Never enter into a “handshake” agreement for a costly project. Most legitimate contractors will be able to provide a standard contract document.

What you really have to beware of are low bidders who cut corners. They may be able to charge an ultra-low price because they are unlicensed and uninsured. Or they may be legitimate but save money by using inferior materials, fail to pull required permits, and otherwise do the bare minimum to perform the job.

Many contractors operate small companies, maybe even a one-man shop. They often are low bidders because of low overhead. Yet even if they are duly licensed and insured, it’s risky to rely on such companies for a major project. If someone gets sick or they book a more lucrative project, yours will get sidetracked, even though work may have already begun and your home is in shambles. If the job turns out to be more complicated than expected, the temptation is great to cut corners because they can’t afford to absorb a loss.

If you do decide to seek competitive bids for any project, keep your eyes wide open. Beware of any quote that is far lower than the others. Make sure all bidders are duly licensed and insured. Make sure you sign a contract that details all of your expectations.

Better yet, find a company that you trust and have worked with in the past, or at least one that comes highly recommended. Give them the job, even if you have to pay a little more. In the long run you will likely end up saving money, as well as avoid so many headaches associated with a botched home improvement project.

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