Wise Construction Companies Do Not Compete on Price

Jan 7, 2010     Topics: commercial construction industry

Craig Noble

As I come into contact with more owners and executives of established commercial construction companies, I’ve noticed that they operate with a certain swagger.  And they appear to be able to navigate their companies through any economy.  They have built strong company qualifications over a history of more right than wrong decisions.  They consider their projects successful when word-of-mouth creates more projects for them.  They maintain business relationships that create introductions to other valuable relationships.  And they provide quality products or services at a fair price.  All of these characteristics strengthen their company’s reputation, which they protect at almost any cost, because they know it’s their reputation and qualifications that get them through the tough times.  When the economy slows and some companies start trying to compete with unrealistic prices, the established companies know it’s the beginning of a cyclical shakeout that puts the reckless and foolish out of business.

And when they are not awarded a job because of price, their reaction often sounds like this:

“We were uniquely qualified for that job, and we should have gotten it.”

“That job can’t be done for that contract amount.”

“The company that got the job is gonna make a mess for (respected client).”

“I hope that company doesn’t cause overall harm to (respected client) when that company goes under trying to finish the job.”

Established commercial construction companies have earned their swagger weathering the boom and bust economies, and they are almost never the lowest bidder.  An unrealistically low bid on a project is a sign of a rookie mistake or a desperate company.  In either case, the GC or Construction Manager that goes to contract with an unrealistically low bidder is signing up to play the change order game – or they are agreeing to a compromise in schedule and quality of work.

JobSite123.com helps GCs, Construction Managers and Owners manage the risk associated with the proper prequalification of resources…while simultaneously providing an online means for established companies (and the smart rookie companies) to showcase their qualifications and reputation.  The wise construction industry leaders recognize the value of building their company Qual-Port for their own business development efforts – and to help their clients.

Tags: commercial construction companies, Construction Managers, GCs