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Thread: Free fixed price quote on large site

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    Site Caretaker Dave A's Avatar
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    Free fixed price quote on large site

    I'm wondering how everyone else feels about RFQ's like these.

    We've been asked to quote for electrical repairs on a fairly large site - a college campus - which is in pretty poor condition.

    There is limited access to the site, and our original plan was to identify the classes of components that might need repairs, and then submit a bill of rates, an estimate of the bill of quantities, and provide for variation orders to cover any variations from the estimate provided (typical construction contract).
    However, the client now insists they want a fixed price contract (essentially a turn-key deal).
    My electrician advises it will take two days to accurately assess the work needed to restore the installation to full working condition.

    There are 4 contractors bidding for the work.
    The client expects each contractor to carry out their own assessment of the site and commit to a turn-key contract.
    The client is not prepared to pay for the preparation of a bill of quantities.

    What would you do?
    Pursue?
    Walk away?
    Any other suggestions?
    Last edited by Dave A; 30-Nov-11 at 10:36 AM.
    The trouble with opportunity is it normally comes dressed up as work.

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    Gold Member Chrisjan B's Avatar
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    My gut feeling say walk away...
    If it start like this you will be very sorry later on...

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    Diamond Member Justloadit's Avatar
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    I understand why the fixed quote - they have to get the funds approved, and if it is not a fixed amount they won't be approved.

    Double your estimated quote price. If you do not get it so what, if you do then it is worthwhile taking the risk
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Diamond Member AndyD's Avatar
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    There's no yes or no formula for these type of tenders. 50% of my consideration would be the feeling I get from the client. I would only usually go with a fixed price deal for issues that aren't already existing but like I say it'sa difficult call.
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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Justloadit View Post
    I understand why the fixed quote - they have to get the funds approved, and if it is not a fixed amount they won't be approved.
    Fair enough - but then why not spend the R4k or so it's going to take to generate a proper bill of quantities.

    Quote Originally Posted by Justloadit View Post
    Double your estimated quote price. If you do not get it so what, if you do then it is worthwhile taking the risk
    My thinking is somewhere between that and walking away at the moment, and probably the other contractors too.
    The irony is it will probably end up costing the client more than if they'd gone the classic bill of quantities route.

    Talk about penny wise and pound foolish
    The trouble with opportunity is it normally comes dressed up as work.

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    Gold Member daveob's Avatar
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    Sounds like the RFQ is coming from a bean-counters point of view. I understand this, but it doesn't solve your problem.

    Perhaps you could do the PR exercise of sitting down with the client and explaining so they understand how they can save themselves from being over-charged by "just in case" over-quotes.

    Best case result : you get mega brownie points for being honest and working with the client. A good & honest reputation is worth a heap load when it comes to deciding on the company to use.

    Worst case : you walk away and don't look back.
    Watching the ships passing by.

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    Bronze Member rfnel's Avatar
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    I reckon that you know far more about the nature of the work to be done (compared to the client).

    If it were up to me, I think I'd lay down the terms and explain everything that needs to be taken into consideration. Then give the client the option of taking it or leaving it. If it means that I'll shoot myself in the foot, I'd rather not get the contract.
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    Diamond Member Justloadit's Avatar
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    Quote Originally Posted by Dave A View Post
    Fair enough - but then why not spend the R4k or so it's going to take to generate a proper bill of quantities.
    This may be a problem for the department making a procurement. They can not justify the reason to spend R4k to get a quote.

    Remember it may not sound logical to us folks who run our own businesses, but in these kinds of organizations, that's how things work. They are not experts at the work they require done, and the final decision is going to be based on cost.

    So spending your time with the client, is wasted, simply because the specific person who you going to spend time with, does not make the final decision of who to give the order to.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Dave A (01-Dec-11)

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    you have to quote right. chances and gueswork will come back and bite. take the knock and do a free quote/assesment, you will get the job and make the profit. and if you dont get the job, at least you know you have done right. and the customer will also know that you at least did it the right way, no gueswork.

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    Dave A (01-Dec-11)

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    Site Caretaker Dave A's Avatar
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    Thanks for all the feedback, everyone.
    Quote Originally Posted by daveob View Post
    Perhaps you could do the PR exercise of sitting down with the client and explaining so they understand how they can save themselves from being over-charged by "just in case" over-quotes.

    Best case result : you get mega brownie points for being honest and working with the client. A good & honest reputation is worth a heap load when it comes to deciding on the company to use.

    Worst case : you walk away and don't look back.
    Tried it - not sure we even got brownie points for being honest...

    We've solved it by breaking down the broader work objectives into bits, and submitting separate, accurately assessed and clearly specific quotes. If there's something that's not covered among that lot, it's not covered.

    Might mean we only get parts of the work, or none at all - but I'll sleep easy however it goes now.
    The trouble with opportunity is it normally comes dressed up as work.

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