One of major pitfalls of general contractor (GC) estimating on infrastructure projects is getting the right numbers from the electrical bidders. Electrical trades comprise a significant portion of the contract value on large fixed-price infrastructure projects. GC’s are faced with the perilous task of taking prices from electrical subcontractors and electrical vendors. The complexity of this task is significant and its impact on bid outcomes is huge. Hard bid infrastructure projects are neither easy to bid nor easy to execute. Getting the right electrical numbers is critical to submitting an overall bid which is realistic, competitive and which represents costs that can be achieved – and that yield an acceptable profit for the risks incurred.
As a GC, if you are only relying on numbers from the electrical bidders, then you risk becoming a price taker. This can be dangerous on a large trade line item because the GC is assuming that the prices taken are competitive and reliable. Experienced GCs develop methods to validate electrical pricing in house, and do not rely solely on pricing submitted from subcontractors. These methods vary in their scope and complexity. We will explore these methods and speak directly with successful GC to get their views on this important matter.
In today’s brutally competitive construction market, GCs need to understand that there is a difference between what things “cost” and what they “should cost”.