Sub-contractors and Vendors- Has the Time Come to Shop Around?

Sub-contractors and Vendors- Has the Time Come to Shop Around?

The construction industry is full of strong loyalties – working with a tried and true group of professionals on a large project can be similar to being on an athletic team or in a military unit – you come to depend on the capabilities of those who surround you. If you have been a contractor for a while, there may be certain sub-contractors and vendors on your speed dial for when a project appears to be on the horizon or is coming up for bid. It’s only natural – these are architects, electricians, painters, and building supply vendors you know can be counted on. They show up on the job when they’re scheduled and don’t leave until their task is complete or always have the materials delivered as promised with a minimum of backorders – what more could you ask for?

When times are good and everybody is busy, that is about all you can ask for – you and the contractors and vendors working along with you are all making decent profits while performing as a well-oiled construction team. But what about when times aren’t so good – what about when the industry is experiencing a downturn such as it has been suffering through for the past several years?

Being loyal to your team of contractors and vendors is great – as long as it’s not being harmful to your own company and employees. If you’re losing projects where you know your own costs were in line, is it time to shop around to ensure the other members of your team have done the same with their prices?

One of the best opportunities for double-checking the prices you’re receiving from your favorite contractors and vendors can be when preparing a price for an advertised bid project. As the bids flow into your company’s email account and over the fax machine, instead of throwing the proposals from unknown companies into the trash, compare them to the numbers submitted by your regular team. Keep in mind that you’re always going to receive low-ball prices from contractors who haven’t completely read the specifications or who are desperate for work, but if the majority of the prices for one phase of the project are below the bid you planned to use, it may be time to have a talk with that particular contractor or vendor.

Loyalty is great and should be rewarded, but not if it costs you work and possibly your company.

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Posted on Aug 27, 2011 by admin | Posted in Construction Project Management, Joint Ventures, Managing Suppliers, Subcontractors

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