Speaker 1 (00:00): Bid day hustle General Contractors Baton Rouge.
<Silence>
Speaker 2 (00:09):
All right, so this is episode six, and this is talking about bid day at Kelly Construction Group. Take one.
Speaker 3 (00:22):
So here’s the scene. The phone’s ringing. The fax machine’s beeping.
Speaker 2 (00:28):
<Laugh> <laugh>.
Speaker 3 (00:30):
Alright, let’s start over.
Speaker 2 (00:33):
Okay, this is bid Dig, Kelly Construction Group, take two.
Speaker 3 (00:37):
So here’s the scene. The phone’s ringing, the fax machine’s beeping. The emails are flying in. We’re deciphering contracts. We’re deciphering propo. Ah,
Speaker 2 (00:51):
Internet’s down. <Laugh>. Okay, we got, this is gonna be bid day at Kelly Construction Group. Take 37. Action.
Speaker 3 (01:06): Get ready, get set, go it’s bid day General Contractors Baton Rouge.
So here’s the scene. The phone’s ringing off the hook, the emails are flying in, the fax machine’s beeping. Your underarms are sweating. All kind of things are happening. We’re reviewing subcontractor proposals. We’re trying our best to throw this thing together. It’s five minutes to two. I still need three numbers to finish this thing up. We gotta wrap this bid up. Let’s go.
Speaker 2 (01:31):
I’m getting stressed out just listening to this. Welcome back to the K-Cup, y’all. This is episode six and today, as you probably guessed it, we are talking about bid day at Kelly Construction Group. So let’s dive back in here with John, the CEO and founder of Kelly Construction Group, and he’s going to give us some insight into a couple different ways that bid day can go.
Speaker 3 (01:58):
Good deal. Yeah, I’m ready for this, Joe. Should be a fun episode.
Speaker 2 (02:01):
<Laugh>, I’ve you set it up.
Speaker 3 (02:02): Let’s drill in a little deeper here General Contractors Baton Rouge.
Good. I’ve had a few people ask, you know, what is bid day like at Kelly Construction Group? And a lot of people don’t understand, you know, the bid process and what goes into it. Yeah. And a really, really a lot goes into a bid. You know, our estimators could really come in and probably give a better show on this, but, you know, fortunately I’ve had quite a bit of experience doing it myself through the years. Yeah. Yeah. So just today we wanna give a little glimpse of what that looks like. And there’s actually a couple scenarios here that we would consider kind of bid day, and I’d like to spend a day just talking about a few of ’em, giving some insight on, on what they look like. Cool. so the bid process, you know you got your estimators, they set up your bids, they send out their rf, qs or RFPs to all the subcontractors that they’re wanting to bid with.
Speaker 3 (02:52):
And it really takes a lot of work to, to get all that organized. Yeah. Like, you know, they go back and forth with those guys getting RFIs ready for the architects so that they can make sure they’re putting together a solid bid. So it’s a big process, you know, up to bid day. I mean, typically these guys are going out to a you know, a pre-construction, I’m sorry, a pre-bid. Yeah. where they go out and they meet the architect, the owners, and, you know, usually a lot of other subcontractors are there, check out the job site you know, and start trying to decide right then and there, like, what, what do you gotta do to get this job? Yeah. But the part that gets interesting, really interesting is bid day. And bid day is where is typically compile all of these numbers you know, and, and your numbers to, to put together a bid and you’re trying to be the lowest, but you still wanna make money mm-hmm <affirmative>.
Speaker 3 (03:44): Bid day is pivotal to the business and revenue General Contractors Baton Rouge.
So there’s a lot that goes into it. Yeah. And bid day usually looks, it starts a little bit slower. Usually bid day, you hear early estimators come in a little bit early on bid day. They’ve already put, you know, a substantial amount of time into mm-hmm <affirmative>. Understanding the plans. And I’ve already kind of formulated somewhat of a plan on what we gotta do to try to get this job. Yeah. But we made a little funny intro here, but that’s kind of what it looks like the closer to bid time. Yeah. It’s it’s significant amount of pressure for our estimators. Absolutely. there literally is like emails coming in back to back to back to back specifically on public bid, which we do a fair amount of. Yeah. But, but even on invited bid, you, you can still run into the same thing.
Speaker 3 (04:30):
Yes. But, so those bids are coming in, you have to decipher those bids. You read through ’em, make sure you understand them, find a number that you wanna plug and, and you’re comfortable with, and you plug it and you keep moving. And typically these jobs are pretty big. So you doing this over a number of scopes. So it, it’s, it’s a lot of, it’s a lot of pressure. It’s a lot of things that you gotta think about. You have to have a well, well-oiled approach for sure. A lot of it’s not in your control either. Yeah. No, I mean, a lot of times it’s not, and we will get to that in just a second, but basically you plug in these numbers you’re trying to get to, to the bottom the bottom dollar that you can. Yeah. And usually, usually these things bid around 2:00 PM or something like that most of the time.
Speaker 3 (05:13):
Mm-Hmm <affirmative>. The dates, I mean, the time can change, but typically it’s 2:00 PM and there, there are times where it’s a few minutes to two and you waiting on a few key numbers Yes. That you need and you gotta get ’em in. Yeah. And lots of heart pounding and sweaty hands trying to get this thing pulled together. But it’s a lot of pressure and, you know, our guys do a good job at it. But it’s a very hectic day. It’s a very hectic day for sure. And you’re wanting to put together a very solid bid. You’re wanting the job very bad also. But we, we go into these things with some parameters. We, we try to, you know, we try to know what the number needs to be. We know our numbers, so we try to make sure that we, that job can work for us, you know? Yeah. but, but lots of pressure. And you know, I said fax machine earlier, <laugh>, and that was, yeah. That was a real deal at one thing.
Speaker 2 (06:07):
What is a fax machine? I’m not, not even sure what that is.
Speaker 3 (06:10):
Yeah, no. So look, I’ve been doing this for a long time. When I first started fax machine was like huge. Like lots of bids would come across from the fax machine, which
Speaker 2 (06:18):
That na teletype Right. <Laugh>. You remember teletypes right General Contractors Baton Rouge?
Speaker 3 (06:21):
Which is funny because now literally we never, we don’t even have a fax machine here, <laugh>. But it was a real deal at one time. But that, that’s one way that you get a number for a job. Yeah. You pilot it in like that, it’s real hectic. It’s real fast. You know, you do your best to do a thorough review. Some subcontractors do the honor of sending you a scope sheet prior to sending you a number, so at least you understand Yeah. What their, what their scope is. And you’ve been through it and you kind of have an understanding of what their plan is. Yeah. but as you can imagine, trying to compile a bunch of numbers and usually a large majority of those numbers in 30 or 40 minutes, and then a couple key numbers in the last five minutes. Yeah. Pretty hectic way to try to get work. Yeah. And it’s, it’s pretty common. It’s, it’s very prevalent in, in our world. Yeah. but something that we do week in and week out,
Speaker 2 (07:20): More good stuff General Contractors Baton Rouge.
Like you mentioned a lot of times you’ll, there may even be another person who’s at the location where the bid has to be submitted if it has to be submitted in person, and they may be hanging on the phone waiting for us back here to compile those numbers that you’re saying that may come in literally 30 seconds Right. Before they gotta turn the bid in, and then that person has to get that written out.
Speaker 3 (07:43):
Yeah. Lots of sweaty hands on bids day. Yeah. And, and to your point, that person is sitting at the bid site
Speaker 2 (07:48):
Stressed Yeah.
Speaker 3 (07:50):
Oftentimes because these things have to be hand delivered. That’s right. Waiting on a, waiting on a number that our estimators are probably waiting on a number. Yeah. And it’s a crazy process to think that that’s the way bids happen, but Yeah, they do. It’s just the nature of the beast, I guess. Yeah. But we also have another, another form of bid that we do that’s I guess a little less stressful, and I’d say a lot more organized, actually a lot less stressful as well. Yeah. And that’s our, that’s our bid presentation and what that looks like, it’s, it’s similar in a sense, but typically your business with some hand selected subcontractors, a lot less people. Yeah. You’ve typically met with an owner, and if they don’t know their budget, you at least have an understanding of what their budget is and it’s a project that starts off with that method.
Speaker 3 (08:43): Here we go General Contractors Baton Rouge.
Yeah. And typically we would put together a solid budget if they don’t have plans. I mean, a lot of times, like an owner will come to us with plans ready to go and it’s, it’s something that where we look at it, we, we put a number on it, we give, you know, the value that we think we bring as a contractor. And bid day usually looks like a presentation. Yeah. We’ve had ample time to meet with our subcontractors. Not, not a rush to be an ample time to meet with ’em, maybe even go sit down at their office, go through it. Yeah. Explain, you know, what the owner’s trying to accomplish. Put, put a lot more time and, and effort into trying to meet that client’s need, because we’ve met with the client, we have an understanding mm-hmm <affirmative>. But getting back to what bid day looks like in that situation a lot of times we’ll have a, a solid number built, whether it’s a design build type thing where we’ve already put together preliminary bid or plans, preliminary plans, preliminary elevations and we, we kind of present that with our budget.
Speaker 3 (09:52):
Or if they’ve already had the plans, then, you know, we, we come in and we submit a budget and at that point it’s, it’s a lot less stressful. Yeah. Usually some hot cookies on the table, <laugh> some cold milk or maybe water, fresh cup something. Yeah. Honestly, a lot of times we ask the client what they like, so we make sure we have a few of those on the table mm-hmm <affirmative>. But just a lot less stressful. And at that point, we sit down with the client, we go through the bid, we give them a real understanding of where the numbers are derived, and then we also share where we think we can excel, where we think that we can get ahead of schedule. Yeah. And, and just try to lock in a job and, and zero in on a job in that manner. Yeah. so it’s like the chaos day, throw a bunch of numbers, do a bunch of discovery, and do a whole lot of whatever to try to squeeze it all into this one small number and throw it in there, or it’s basically a presentation.
Speaker 3 (10:47): We’re getting close General Contractors Baton Rouge.
Yeah. And we’ve had a little more time and you know, understand the client’s needs and our guys much prefer this method. They wanna be able to sit down and talk to you and tell you how they got to those numbers. Yeah. And, and just really explain to you, you know, the ins and outs of your project and explain how we landed where we land. Yeah. it’s always nice to, to have all those things go into consideration mm-hmm <affirmative>. Rather than just a low number. Yeah. So that’s kind of the things that I wanted to talk about on a day’s show, just the two variants of bid day. Yeah. And give an explanation of, of what they look like and how they feel. So if somebody is looking to come do business with us and, and they’re thinking about the different ways they can do it, then, you know, the bid process is not a bad way, but obviously our preferred way is the second method. Let’s, let’s work together from the beginning. Yeah. Let’s get to a, let’s find a place that that everybody’s comfortable and let’s, let’s go make a project happen. So that’s kinda what bid day looks like here in the office at Kelly Construction Group. Yeah.
Speaker 2 (11:58):
So I wanted to back up a little bit and, and talk a little bit about the pros. It’s not surprising <laugh> that hurt, man. I wanted to back up a little bit and talk about the pros and cons of each of those, because one is definitely preferred over the other, but both kind of serve a purpose. Right. And and there’s definitely pros and cons to each of them. So on the on the con side of the competitive bid market, what are some of the things that you see there that make it not so desirable
Speaker 3 (12:34):
On the public bid
Speaker 2 (12:36):
Yeah. Or competitive
Speaker 3 (12:36):
Bid, or the bid process. Yeah. So I mean, obviously you’re asking about the cons. So I mean, the cons are you’re getting a lot of, you’re asking the contractor to compile a lot of numbers in a really fast time period you know, trying to, trying to make the bid as competitive as possible. Yeah. so the con is just not really having the time to decipher subcontractor numbers, to decipher their exclusions and all of those things. And, and able to put together the best possible bid. So I’d say the major con is just not having enough time to really be super diligent.
Speaker 2 (13:18):
Yeah. Another con that I see that’s, you know, definitely a negative is that you don’t get the opportunity to, to demonstrate or sell the value that you bring to a potential project.
Speaker 3 (13:33):
Yeah, absolutely. You want the owner, you want the owner looking at us and, and understanding what we bring to the table. We don’t want ’em just looking at a number saying, you know, here’s the lowest number out there. Yeah. Let’s go with them. And, you know, that happens a lot. Yeah. and, and it’s, you know, oftentimes you’re introduced to a project or brought onto a project by somebody who has confidence in you. So I understand that owners can have confidence with a low number, you know, if you’ve been brought on by an architect or an engineer or whoever brought you into the project, that gives the owner some confidence. But like you said, we really like the opportunity to, to sell on value, not based just on our number.
Speaker 2 (14:16):
Yeah, absolutely. As far as the upside of the competitive bid process, there are a couple upsides to those, to that form of bidding. One that I can think of is it, it gives contractors who may have only been in the business a few years, but meet the requirements to, to participate in public bid, it gives them access to a variety of, of different kinds of projects and maybe larger projects than they would be able to go out and procure on their own, having, you know, know a very limited you know, resume.
Speaker 3 (14:54):
Right. No, that’s a great point. And because if, if everybody’s just, you know, waiting on this introduction to this big pro project or just needing somebody to kinda say, Hey, this guy’s good, and you don’t have any experience, then, you know, that’s a tough road. So that’s a great point. I mean, it does give you an opportunity to get in there and bid some jobs that you, that you’re qualified for, but maybe you don’t have it on your resume. Yeah. great point. That is, that’s a great point. That’s definitely, that’s definitely a, a, you know, a pro for, for that bidding process. Yeah. You know, the other thing too is the owner does truly get the lowest price. Yeah. Now we know that at the end of the day, you could run into change orders, you can run into different things because that style of bidding that we were just talking about Yeah. Lends itself to errors. Yeah. And you, you see it time and time again for
Speaker 2 (15:44):
Sure.
Speaker 3 (15:45):
But generally speaking, and, you know, depending on the client, they, they, they typically do get the lowest possible number Yeah. For their bid. But we also know outside of what we just talked about there, there may tend to have some quality issues and other things, you know, just, just from avenues that were taken to get to that lowest bid. Yeah. so definitely there’s, there’s, there’s certainly some pros and cons to both methods. Yeah.
Speaker 2 (16:14):
I’d see, I’d say another pro to the competitive bid market is the opportunity to, obviously as any business owner wants to develop private work ultimately ’cause private work is gonna be way more profitable and it puts you in the driver’s seat, it allows you to maintain some control over the process where obviously the way you described bid day, it’s pretty much outta control. You know, you’re just, you’re, you’re doing a lot of stuff and then hoping for a great result. But you know, with, with the competitive bid market, there’s that opportunity for somebody who is really applying good business principles to recognize it for what it is and utilize it for its strengths. One of which is that you can use that as kind of a foundation to procure work, get cash flow, keep your, the people that you are bringing on board as you grow and, and gradually staff up, keep them busy and, and making a paycheck while at the same time you’re developing that private side of your business, you’re, you know, developing the skills and the, and the relationships necessary to, to get those opportunities.
Speaker 2 (17:26):
So, you know, there’s another way that it could, it serve your purpose, you know, and, and like you’ve said in other discussions we’ve had about it, you wanna be careful not to get into that game of just thinking you gotta win every one and just going as low as you can go to win it, because that’s not smart either. But there is a time and a place to, to, you know, basically cash flow and cover your, just cover the bare necessity so that you can stay in business and Yeah. And work on other aspects of your business.
Speaker 3 (17:54):
Right. I’ve never heard you talk about so many pros to the the bid the bidding world.
Speaker 2 (17:59):
<Laugh> gonna surprise you, huh? Yeah, absolutely. See, there you go.
Speaker 3 (18:02):
No, but I agree there, there certainly are benefits to both ways. Yeah. I, I think anybody wants the opportunity to sell their self and sell their company. So yeah, I believe everybody would like that opportunity. But I know as a company, we’re, we’re very appreciative when we get the opportunity to bid projects even, you know, even when we’re not having that opportunity to sell our ourself, we’re always very appreciative of, you know, architects and engineers that we work with Yeah. To give us that recommendation to get on the bid list. And, you know, we go out there and those opportunities and we give it our best. I mean, we, we try to make sure that the project works for us. And you know, we made it sound really chaotic in the beginning, and it is very chaotic, but there’s also an, an intelligent approach to it, you know?
Speaker 3 (18:46):
Yeah. we, we processes we already make, we try to make sure that this project’s gonna be a good fit for us. Yeah. We think it through before bid day. Absolutely. To understand, you know, how we can go, how we can go cheaper than a competition, but still make it a good profitable job for us, and also make it the job that the end user or the owner’s hoping to get. Yeah. So that’s kind of the two worlds that we live in. Yeah. I think, like you say, we’re, we’re, we’re, we like to sell ourself. We love that presentation, but but very appreciative for any bid opportunities that we get. Sure.
Speaker 2 (19:22):
So not to stump the teacher or anything, but is there any downside to the, to the private you know, the private lead type of opportunity? Do, is there anything, any words of caution there that you’d, you’d share with anybody? Well,
Speaker 3 (19:38):
I mean, from my point of view, not really, no, I’m kidding. <Laugh>. I mean, I think, I think the one, you know, one downside that I can think of right away is well, we like, we like for the owner to get to know us in the beginning Yeah. Because we want ’em to trust us. We want ’em to understand our views and then we wanna work towards that number. But I think the downside, you know, for the owner is they, they do only have our point of view. They only do hear from us. And while we’re gonna be truthful and honest, and we’re gonna give ’em, you know, everything we can give ’em Yeah. As true as we can, there’s always, there’s always other methods, there’s always other avenues. So I think the one downside I would say is just not getting multiple point of views. But in that same breath, you know, I know oftentimes they’re, they’re talking to other contractors and stuff as well mm-hmm <affirmative>. But I would think that that would be the one downside that, you know, if, if, if a potential client just kinda locked into one person you’re only getting that person’s point of view or that company’s point of view during the process.
Speaker 2 (20:51):
Hmm. Okay. I wouldn’t have thought of that. I, I’d have thought that that’s kind of what we want. No. Just to have them get our point of view, but Well, it is, but the concern is that you’re afraid that they might have buyer’s remorse or something, or, or think that maybe they didn’t turn over every stone. Yeah, no, and went into the process. I
Speaker 3 (21:10):
Was trying to not come from just our view. I was trying to think from an owner standpoint. Yeah. Like what might be a
Speaker 2 (21:17):
Kind put yourself in there
Speaker 3 (21:18):
For us. Like I said, I really don’t see a lot, there’s not a lot of that I could, I like that process. Yeah. I don’t see a lot of downside for it from us,
Speaker 2 (21:28):
If you will. I gotcha.
Speaker 3 (21:30):
I guess you’re still the teacher <laugh>.
Speaker 2 (21:33):
No, it, it’s not unlike me not to get it the first time around, but I got it. I’m clear on it now anyways. All right. So I mean, it’s, it sounds like it was a good comparison. I did get to surprise you because I did bring the positive sides of the competitive bid market, right? There are upsides to, to most coins, if you just flip ’em over and check out the other side, you know, you just have to take time to do that. Obviously we prefer to be in the driver’s seat if we can. So you know, the private, the private bid market is, is definitely more desirable, you know, as far as the bottom dollar’s concerned. But as we said, as we brought out, you know, the competitive bid market does serve its purpose and and it is a source of opportunity, particularly for young contractors getting started out there. So.
Speaker 3 (22:25):
Right. Yeah, we’ve definitely done our share of the public bid and we, we still do a fair amount of public bid.
Speaker 2 (22:30):
Yeah, for sure. Okay. Anything else that you wanna share about, you know, the, the comparison of these two methods for pure
Speaker 3 (22:39):
Work? No, I think I just wanna crawl with a hole after that last one, so I’ll just stop right here and <laugh> we’ll we’ll call it. Good.
Speaker 2 (22:46):
All right, well, we’ll, we’ll co you out that hole here as soon as we turn the camera off.
Speaker 3 (22:50):
<Laugh>.
Speaker 2 (22:51):
Hey, glad y’all came back and visited us at the K-Cup and come back again. We’ll have some more if not valuable information, <laugh>. It’ll at least be entertaining for you next week. So have a great rest of your week, and we’ll see you here in a week. Thanks.
Speaker 3 (23:10):
Cutting.
Speaker 2 (23:11):
Cut.
Speaker 3 (23:13):
All right.
Speaker 2 (23:15):
What’d you think about them? Apple.