When to Obtain Subcontractor or Supplier Bids

Tuesday, August 01, 2017Eric Huzzy

In estimating, the question often arises of when to get a sub-bid. For those not familiar with the use or need of sub-bids, some of the trades where sub-bids are most helpful include electrical, plumbing and HVAC contractors. These sub-bids are especially helpful in the restoration industry after burst pipes, electrical fires, and mold infested ventilation systems. If relevant, it’s important to take into account which party is removing the existing material.

Common equipment on subcontractor projects may include, lifts, generators, compressors, light towers, heaters, scaffolding, temporary fencing, loaders and attachments. With these items, it is important to select the appropriate tool for the situation. For example, you may have trim and painting 35 feet above the ground. While it seems that a lift capable of reaching 45 feet is adequate, it may not be if you cannot get it close enough to the building, or if there are obstructions. The same can hold true with cranes. If trees and/or power lines obstruct access it can require the need of a larger capacity crane than what would normally be required. Context is always critical when communicating specifications to a supplier or subcontractor.

When renting equipment you must also be aware of delivery and pickup charges, minimums, and availability. Building an established relationship before a job starts with your supplier can go a long way in understanding their schedules and needs.

Even more important to a sub-bid scenario is the vetting process. Before specialized labor is hired or equipment is rented, a legal agreement must be reached about the provider’s capabilities. After examining the organization and concluding they’re suitable for the job, collaboration can begin.

Another area to consider is when a project involves removing or disturbing mold, lead paint, or asbestos containing materials. It is a good practice to have a hygienist provide protocol for the proper handling of these items so the work can be priced correctly. Hazardous conditions can sometimes greatly affect the estimation process and put a team at risk.

It is not uncommon for a client or insurance carrier to not want sub-bids used in a repair or consulting estimate. However, this does not always mean that you should not obtain a sub-bid. In this case, the sub-bid acts as a benchmark as proper pricing is determined. Once you have the correct pricing you can then use your estimating software to double check and further validate this price or make adjustments as needed. A sub-contractor may not be signed to do any work but their evaluation of the job can still be useful.

It will often make more sense economically to bring in tradesmen on a subcontractor basis rather than signing them to a full time contract. While one may require an electrician on a few jobs, several others may not and having a specialist on payroll at all times may not be cost-effective. Having a subcontractor gives you the flexibility to grow your team as needed.

In the end, if you’re not sure whether a sub-bid is warranted or not, check with your production department. They will likely have a host of examples of when it’s appropriate to get another team involved.

About the Author

Eric Huzzy
Senior Consultant/Estimator

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