When opportunity comes knocking, will you be ready? In the commercial world, selling a variety of products and services is vital if you are going to be considered as a bidder. It’s not just your willingness to sell carpet and ceramic, but getting involved with ancillary products and installation. In some cases, you end up being a quasi construction manager as well as selling your flooring products and managing the installation. Here is a story about such a job (with names and project data changed for confidentiality):
A prospective client, Maureen, had received a mailer with information about our company and its capabilities. She was the property manager of a large high-rise condominium property and wanted to find companies interested in bidding for their upcoming remodeling project. One of her first questions was, “Do you just do carpeting, or do you handle other related things?”
We had already been talking about expanding our commercial product offering to include wood, laminate, and ceramic. Of course, we had experience with these products residentially, but had done little commercial work on those products. We had already been involved with commercial wall covering and some painting.
I asked Maureen what she had in mind. She related the following story when the condo undertook a major remodeling project seven years ago. They decided to be their own construction manager and awarded multiple contracts for painting and wall covering, carpet replacement in common areas, ceramic in service areas, lighting replacement in various areas, and window treatments to the bidder with the lowest quoted prices.
In her words, “This was the biggest @#%& you could imagine, and I was left to pick up the pieces and supervise the whole rotten mess. I told the committee that ‘hell would freeze over before I went through this again.’ I now have a new board and a new committee and they are starting down this same path.”
Maureen told me the current board suggested she consider bidders that could do it all within our budget. She continued that she was looking for one company that could handle the whole project without having to go through a formal construction manager agreement or a general contractor.
“So, Dave, are you interested and can you do it?” Not knowing the full extent of what was expected, I gave a qualified “Yes, we can do it,” which we could confirm after a site visit and review of exactly what the condo committee had in mind.
I assembled a team made up of Willa, an experienced designer, conversant with the latest trends in colors, fabrics, and flooring fashions for concept work; and a seasoned project manager, Mike, who was a well-organized expert in commercial flooring.
We walked the site with the property manager after a review of the condo committee’s concept of what they’d like to see: A complete flooring change in the main lobby (from carpet to ceramic tile); elevator flooring (from resilient tile to stone). All corridors to have a hospitality type patterned cut pile carpet over cushion; and wood flooring in the main activity room.
All existing painted corridor walls were to change to durable wall covering with chair rails added in all elevator lobbies. Lighting in all corridors was to be changed. Vertical blinds in the main lobby and lounge areas were to be replaced with sheer under drapes, side panel over drapes, and drapery top treatments.
Artificial plants were to be added as appropriate as well as signage for all floors/wings. All doors were to be cleaned, sanded, and repainted.
Since we had responded so promptly, Maureen told us she would use our draft of our scope of work with the committee’s wish list as part of a bid package for other bidders. She also wanted suggestions on the best way to qualify other bidders. If you are in business to make sales, you need to recognize when an opportunity comes your way! And this was certainly one.
After the marathon walk-through, the team sat down and began brainstorming. In order to provide a complete package as Maureen wanted, and a scope of work, we had to find out what was available in lighting; steps to be taken to refinishing doors and repainting; product selection options for carpet, ceramic; and fabrics for wall covering and window treatments. One of the concerns was whether the elevators would handle the extra weight of the stone flooring.
We only had a week to get information back to Maureen for her review, so we split up the workload amongst the team. Willa, would search for fabrics, ceramic and carpeting. Mike would take preliminary measurements of all areas for flooring, wall covering, areas to be painted, number of doors to be refinished, and ideas on the project schedule that would have to be followed. Dave would locate sources and subcontractors for lighting, wall covering, painting, signage, and fabrication of window fashions.
After several days of chasing down facts, we began to have an idea of how the project would come together and a rough estimate of cost. Now the question: Did the condo committee have the money to do what they wanted? How could we get that information?
When in doubt, just ask the question: “What is your budget for this project, Maureen?” She smiled and suggested that, “You must have some idea of what all of this will cost, so why don’t you tell me what you think it should be.” Well, I was ready for that one. With what you and the committee have outlined, based on a preliminary scope of work, I expect a fair price would be about $570,000. Of course, that will vary up or down according to some of the materials selected, especially with the hospitality type carpet you want. How does that sound to you?
I was watching Maureen closely; the blood left her face, and she said, “We were hoping it would be a lot lower than that.” How much lower I asked, sensing that she would not be comfortable with a dollar figure. Percentage wise, how far away from this do you think we would be? She responded, “Oh, I would hope we’d be at least 15-20% lower than that. Do you think that’s possible?”
Now I had some idea of budget. The condo board probably had around $500,000 set aside for the project, were hoping to spend no more than $450,000, and to be safe, they probably would not approve the job for much over $480,000. Since the number I had given Maureen was for higher end materials, I knew the numbers could be lower.
I responded with: “Yes, I believe the right company, if they get the whole job, would be able to stay within your budget range. However, my suggestion is to provide you with a menu of options that will allow you to make changes in your wish list so as to hit those numbers.” She quickly agreed and asked me to include that in a scope of work.
After refining our estimates on various project parts and selecting our supplier partners, we put together a comprehensive draft scope of work and asked Maureen for feedback. “Does this draft capture the Board’s intent for the project and is anything unclear? Have we left out any of the project parameters?”
During the face-to-face meeting, she pointed out several areas where she had questions and suggestions; overall, though, she said we had provided a good framework. We also suggested an interview/presentation process for invited bidders. After meeting with the Board, Maureen prepared a written bid proposal with the scope of work and pre-bid requirements to eliminate unqualified bidders and inappropriate product offers.
Part of the bid proposal process was a meeting between qualified bidders and the condo board committee to review design concept design boards outlining bid proposal options by a bidder.
The meeting accomplished several goals: A good hard look at the bidder’s concept for the project, their approach to dealing with the committee’s schedule concerns, and the depth of the bidder’s resources for handling the project segments. After these meetings, the board invited several bidders to offer their written proposals in response to the board’s bid document. We made our submission and followed up aggressively. As we had hoped, we were one of the final bidders under consideration. We were asked to trim our price on several options, but we understood that “if you can make some adjustments to hit our budget, the job is yours; you had the best overall package and we liked your credentials.” So, after negotiating, we got the job along with a six-figure deposit!
In spite of frustration, many tense moments, and some real challenges with the delivery schedules, we completed the project over a period of seven months. The condo board was pleased, Maureen was still speaking to me, we got paid in full, and the job (just under $500,000) turned out to be one of the more profitable ones that year. If I had not agreed to be responsible for the complete package, we would never have had a chance or gotten the job. Will you be ready when your opportunity comes?
Sponsored by: Roppe