RJ Martin Electric Blog

Learn to Recognize Six Hidden Costs of a Low Electrical Contracting Bid

No one likes to pay more for products and services than they have to. Whether it’s buying groceries, shopping for a vehicle or just about anything else, we’re naturally attracted to low prices, because they help keep more money in our pockets.

Electrical contracting projects are no different. Through decades of experience serving commercial, industrial, health care, retail and education sectors, we at RJ Martin Electric understand the importance that contractors and end users place on competitive estimates. Yet time and time again, we’ve witnessed examples where unusually low contracting bids are accepted—and then the hidden costs that lurk within them begin rising to the surface. The potential results: scope creep, unanticipated cost overruns, delays, penalties—and tragically, even jobsite accidents.

General contractors (GCs) and end users shouldn’t overpay for the contracting services they utilize. But exceptionally low bids should raise eyebrows and cause concern. So what are six ways that electrical contractors bury costs in a low electrical contracting bid?

  1. Not fully defining the project scope or leaving open issues unresolved. Construction projects – including the electrical contracting portion of them – are not paint-by-numbers affairs. Yes, we at RJ Martin Electric clearly articulate our scope of services and develop thorough game plans; but steps, processes, materials and other issues can be interpreted differently by different actors in a construction project. If a scope review isn’t conducted – in our case, for the electrical portion of a project – then the GC or end user may have to make assumptions about those issues that could be costly in the long run. Scope reviews are opportunities to address issues up front, get the necessary answers and make appropriate project adjustments.
  2. Utilizing inferior products, or fewer products than expected. Electrical contractors must provide materials for the projects they work on. And like anything, there are high-quality building products and others that fall short of top quality. An electrical contractor who lowballs his/her project bid may value-engineer their quote—and as a result, utilize products that don’t match project specifications, or are low quality. Some electrical contractors have even been known to install fewer products or fixtures than what was specified in the drawings. Things as basic as light bulbs are a prime example. They come in all shapes, sizes and wattages—and they can vary greatly in terms of quality. Contractors who utilize products like these (or who use fewer products than specified) must do so in order to maintain profitability, given their low bid. But in the end, the project suffers, and the client gets an inferior solution.
  3. Withholding labor on your project. While some electrical contractors may cut costs by utilizing inferior-quality products, or fewer products than specified, they can really trim their costs by starving a project of labor. What does this look like? Well, some contractors will push their electricians to get more done in less time than is customary. That puts work quality and safety in jeopardy. Others may send fewer electricians to the jobsite than necessary and instead dispatch electricians to other projects, which can delay your project. Whatever the case, these practices can cause big problems for the GC or end user.
  4. Employing the B, C or D team. If a contractor lowballs a certain project, he/she may not put their top electricians on that job. Instead, they’ll dispatch their “A-team” to a more lucrative job, and perhaps use less qualified or skilled electricians for the “lowball” project. Again, this puts work quality and safety in jeopardy. At RJ Martin Electric, you’ll always get our A-team, because that’s the only team we have; there are no Bs, Cs or Ds on our squad.
  5. Lack of relevant skill and experience. Electrical contracting in commercial, industrial, health care, retail and education sectors can be highly specialized and require equally specialized skills and experience. Some contractors don’t possess those skills or experience—yet they still bid on jobs in these sectors. Too often, they don’t provide thorough estimates, which can lead to cost overruns and project delays. Additionally, we’ve seen too many instances where plain lack of experience sends costs skyward, delays completion of work, knocks other subcontractors off their schedules and even causes jobsite accidents.
  6. Lack of safety protocols. Again, many (perhaps most) inexperienced electrical contractors tend not to factor safety costs into their bid. While this can make the initial bid cost seem attractive, jobsite safety is paramount in any construction setting (for more on the costs of NOT being safe on jobsites, read our recent blog). In addition to the incalculable toll of human suffering that jobsite accidents cause for workers and their loved ones, accidents invariably cause project delays and drive costs upward.

Contact RJ Martin Electric to learn more.

We hope this blog helps you understand how six hidden costs of a low electrical contracting bid can negatively impact a construction project. If you seek an exceptional electrical contracting firm for your next industrial, health care, commercial, education and retail project, please call Robert J. Martin at 216-662-7100 or email rmartinjr@rjmartinelectric.com.

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