Blog

SHARE









The Value of Apples to Apples Bidding


Tips for Property Managers

By Alexis Wilcox, CPM
Guest Blogger | February 22, 2016

apple red two on white background

In my 15 years in the commercial real estate world I have had the unique pleasure of working from both sides of the table: as a certified property manager and as an account executive on the vendor side. During my management career I worked across a variety of portfolio types: multi-family, retail and commercial office. As a vendor, I serve clients with a wide range of properties. No matter the site, one thing remains the same: the need to collect competitive bids for projects both large and small.

What do you do with these bids once you get them?

I believe the most typical answer is we jump to the bottom line of the proposal: the price. The life of a property manager is filled with many competing tasks and at times thoroughly digesting the content of 3 bids may not make the list, especially for smaller projects.

Apples and Oranges

How can you quickly ensure that the scope of the bid is the same from vendor to vendor? How can you be certain that the low bid won’t come back with a change order that the higher bid has already included in its price?

It all comes down to the scope that was set from the beginning of the process. When bidding a larger job it is typical to put out an RFP (Request for Proposal). This is a great tool but only if it has the pertinent information. An RFP that goes out to 3 vendors should have a scope that is clear, detailed, and includes as much quantifying information as possible.

Ensuring Apples to Apples Comparison

Let’s take an asphalt project for example. If you issue an RFP that says 4 inch depth repair is needed at site X, you are going to receive 3 proposals with different measurements and varying pricing. Now if you add a key piece of information to that scope, i.e. 450 sq. yards of 4” inch depth repair, you are going to receive an apples to apples bid that is much easier to compare. Vendors are happy to set a scope for you to send out to bid. Pick one of your trusted partners and ask them to set a scope of work, and then use that scope in the RFP to send out to other vendors. 

Another way to accomplish the same apples to apples results is to set a meeting with all parties bidding at the same time.

This is beneficial for 2 reasons. First, you only have to walk the project one time. Second, the estimators can determine a detailed scope during the walk through to ensure all bids will have like specifications.

The same protocol may apply when an RFP is not issued. Let’s look at a paint project. You may say I need a price to paint the lobby of building X. One vendor may offer pricing for 1 coat of paint and no door frames, another might offer pricing for 2 coats of paint and all trim.

What about a small concrete repair? You might ask to have a trip hazard repaired. One vendor may remove only the heaved section of sidewalk and another may price the adjacent section as well because it has a small crack that will become an issue in the future.

It’s All in the Details

The more detail you give in asking for pricing, the easier it will be to compare the bids you receive. As your partner, vendors are happy to set a detailed scope for you to share with other vendors. Then you are left with a good comparison for a specific and detailed project; just keep the pricing to yourself!

Do you have follow-up questions on apples to apples bidding? Feel free to contact us at services@pcmservices.com.