As a successful retailer, you’ve made the decision to expand and diversify your business model to include commercial business. You’ve had some experience in Main Street commercial and have made a nice profit on a condo project, a quick-turn tenant build-out, and an executive office suite at the local hospital. Even better, you’ve been mentioned as a qualified bidder for a large hospital addition. Life is grand and you’re on your way, right? Well, there are still a few issues to iron out, like what happens to the rest of your business while you work on the hospital?
Success in the commercial realm can be very satisfying, particularly if it comes at a time when you see a fall off in your primarily business or residential flooring. But there are a number of things you need to keep in mind. Take the scenario outlined above. Let’s look at some of the issues and questions that you should consider before and after bidding on the job.
Should I go after this hospital job? The real question is: Can you do it satisfactorily without hurting the rest of your business (or your reputation)? That means you need to know what you’re getting into from an expectation and required performance perspective. If you have been given qualified bidder status by the hospital’s management based on your recent work for them, that’s great, but here’s what that really means: You’re on a list with other qualified bidders. It doesn’t even mean you have the inside track. Some of these bidders may be local and some from out of town. Since you know the hospital’s facility director, you know his preference is to use a local contractor for flooring, if possible and if the price is right. The new hospital addition has its certificate of need so a budget has been set. Now the pressure is on the construction manager to complete the project on time and on budget. While you may be considering the special needs of a healthcare facility, you should really focus on whether you have the resources to tackle a large construction project that just happens to be a hospital addition. Is this something you should pursue?
How big is this project? Maybe you saw the overall budget in the newspaper, but do you know the actual scope of this project as it relates to flooring? That’s your first step. Find out the name of the architect or design group responsible for the interior. What is their overall concept? Do they want ceramic or resilient with some carpet? If you specialize in resilient but this project is heavy on ceramic, stone, or terrazzo, you may want to pass. This is not the time to learn the nuances of ceramic work. However, if you excel in all things resilient, and that is where this project is going, then you may have a major advantage. Even if it is too early to determine specific product selections, you should be able to discover “design intent.”
The next step is a close look at the scheduling. Is this a one-year or three-year project? You may find that bidding on the interiors part of the project will not even take place for a year. The construction manager will be able to give you a time frame for this. If you are still interested at this point, you need to do a couple of things: Make absolutely sure you are on the bid list, establish a relationship with someone in the construction manager’s office for feedback and updates, and then note a timeline on your calendar for follow up. Many times legitimate bidders don’t even get a chance to bid because of a paperwork glitch or they didn’t get a bid document in time to effectively respond.. As the bidder, it’s your responsibility to get the documents and respond in a timely fashion.
Will I be able to buy products at a good price? Once you confirm the design choices, make sure you can buy, at key dealer prices, the needed products. If you don’t already handle the items selected, there may still be enough time to develop a relationship with the manufacturer. After all, you excel in “all things resilient” and your installers are known for their quality. This will help, because the first thing most manufacturers check is reputation (for payment) and quality (of installation). You want to be able to tell them: “We’ve been doing business in this area for 30 years and we recently completed a high profile project for the hospital. We have contacts within the hospital administration, and we have the personnel to install your products to reflect credit on us both.” It is crucial that you qualify for key dealer pricing for this project. You’ll have a better chance if you begin your campaign early, get to know the mill rep, and have them on your side.
Do you have the bid document? It may take some digging and some follow up, but this will let you know what products are being selected. First, ask yourself if you are you comfortable installing them. Also: Can get them direct from the manufacturer? Now is also the time to ask the construction manager when bidding for the flooring will begin. If he says November that’s your cue to contact him the last week of October. If they stay on schedule you can expect a bid package around Nov. 3, with a return deadline of Nov. 30. Circle this date on your calendar. The bid package will also include a finish schedule and scale drawings. Do not wait until a week before the bid is due to review these. Examine the package in detail. Does your bid require a bond? What about a payment and performance bond? Frequently there are mistakes on the schedule or the drawings, or both. Look for missing rooms, or rooms not clearly marked, or product designations that make no sense (Carpet tile in the operating room?). Your first real chance to ensure your profit on the job is the take-off from the scale drawings. I suggestion you have two people do the take-off. If there is disagreement, you need to pinpoint why. Sometimes it comes down to different interpretations of the finish schedule. Maybe a room was missed, or counted twice. Larger mistakes are easier to find that smaller ones.
Understand that accurate take-offs are vital. More money is lost and more reputations are damaged due to mistakes in take-offs than in any other area of the bid/award process. In one case I recall, an entire floor was missed in the take-off process. In another, vinyl composition tile was ordered for a number of rooms but the finish schedule called for custom woven carpet. In one particularly frustrating bid, there was a transposition error that resulted in no installation labor charges for one-third of the job! To avoid these and other nightmares, set aside time to carefully scrutinize the bid documents. Review your results and double check the figures. Are there items or directions or selections that do not make sense? For example, a real flooring pro will know something is wrong if they see carpet tile specified for an operating room. Remember, it is the responsibility of the bidder to get clarification before bidding. And its not just product information. The expected timeline for performance should be a big consideration. All too often, a three week schedule is reduced to two weeks because of problems with other trades.
Editor’s Note: Deciding whether to bid on a project is important and so is a detailed look at the project scope and duration. After doing a complete take-off, the next step is getting the right price and putting your bid together to get the award, and that’s what we’ll cover in Part II of “Going After a Commercial Job.”