Tim is happy to have a guest from the construction management world on the show this week. There’s lots to be learned which Tim emphasized in his intro in which he entreats the listener to “pay attention” and learn how to price jobs so as not to “look like a fucking retard.” Tim University is now in session.
Dave Angelis is Tim’s guest this week. Dave is a partner with Ivy North Corporation, a project management firm based in Etobicoke. The company has focussed on staying small and working on medium-sized projects that they can service the hell out of. Their sweet spot is on projects in the $10-30 million range.
Tim is curious how construction managers are finding subs to bid on jobs. Developers often have preferred contractors that they go to on a regular basis. Dave feels strongly in bringing in as many bids as possible to find the best contractors out there. They have a list of guys they like as well and they definitely have a shit list of contractors they don’t. Dave likes to get a minimum of five bids per trade. The high bid is probably too busy. The low bid is way too desperate. It’s the guys in the middle that he likes to pick from.
“Have you guys ever fucked up and taken the lowest bidder to get yourself out of a financial jam” Tim asks diplomatically.
Dave admits that sometimes there will be a problem with developer. They may have made an error in their design or maybe the city is holding them up on permits. Whatever the issue is their bank account is draining and they have to make some hard decisions. The problem is when you pick the low bidder they tend to come in and try and nickel and dime a developer. They might bid lower than the cost of the job and then try to add 25% to the job before they’re done.
Tim talks about many bad experiences he has had with general contractors. He was once on a job where every single trade got hit with the same $14 thousand charge for the same problem. GC’s try and make their money by bidding low on jobs and then burning their subs as hard as they can.
“Why would I go to a GC when I know there all these bullshit shenanigans going on instead of hiring a construction manager?” Tim asks.
You won’t find a lot of people building condos with GC’s these days, Dave answers. They are usually on large commercial spaces. There are a lot of companies that need a one-off building like a warehouse. It’s those kinds of builds that you can find yourself getting burned on.