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Thread: Low Bids

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    Member justanotherlocator's Avatar
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    Default Low Bids

    I have seen numerous comments/posts accusing companies of low bidding to get contracts. I am sure there are some that do that pretty consistently. But I also believe there are others that can bid low due to the economics of their company and footprint. For example, Locating Company “A” has a large telephone and CATV contract in Idaho. The major gas company then bids out their work and Locating Company “A” reviews the bid and determines they are already going to each of these tickets with their two other contracts. The financial wisdom is they can bid this lower due to absorbing most of their costs with the other two contracts & this gas company revenue could be very profitable even at a lower price. Then the power company shows interest and again Locating Company “A” is in a position to offer a lower (but profitable) price. That doesn’t mean Locating Company is “low balling” everyone just to get the work, it just means they are in a financial and contract layering position, to offer lower prices compared to a company who is new to the area or has smaller contracts. I just think this is something to keep in mind before accusing a company of low bidding and putting the profitability of that contract on the shoulders of the locators. Just some food for thought….

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    Senior Member beyond help's Avatar
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    Default Re: Low Bids

    This is just a normality in this industry. We all should be used to this. This will continue for the foreseeable future.
    STRESS: The confusion created when one's mind overrides the body's basic desire to choke the living daylights out of some idiot who desperately deserves it.

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    Senior Member Dave72's Avatar
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    Default Re: Low Bids

    .. and "Thank you for shopping at Walmart."
    (May you live in interesting times)

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    Default Re: Low Bids

    Quote Originally Posted by justanotherlocator View Post
    I have seen numerous comments/posts accusing companies of low bidding to get contracts. I am sure there are some that do that pretty consistently. But I also believe there are others that can bid low due to the economics of their company and footprint. For example, Locating Company “A” has a large telephone and CATV contract in Idaho. The major gas company then bids out their work and Locating Company “A” reviews the bid and determines they are already going to each of these tickets with their two other contracts. The financial wisdom is they can bid this lower due to absorbing most of their costs with the other two contracts & this gas company revenue could be very profitable even at a lower price. Then the power company shows interest and again Locating Company “A” is in a position to offer a lower (but profitable) price. That doesn’t mean Locating Company is “low balling” everyone just to get the work, it just means they are in a financial and contract layering position, to offer lower prices compared to a company who is new to the area or has smaller contracts. I just think this is something to keep in mind before accusing a company of low bidding and putting the profitability of that contract on the shoulders of the locators. Just some food for thought….

    This is a common practice, but a lot of your major utilities have seen the flaws in this pricing structure. When you adopt this method your labor focus is geared to your major staple within your contract price structure. Then the secondary contracts take a back seat and I have noticed somewhat of a shift in these secondary utilities awareness of this practice. It is then used as leverage for negotiations.

    They demand 1st class treatment at a secondary rate? Not smart business, for locate contractors on any level. How many raises could be afforded, if the contract pricing was met to standard, etc?

    Many times this results in continued low ball pricing long after bozo company A; who low bid the contract in the first place and exited after they shown their true colors. It sets the price with the utility and they want to bargain from there. It hurts all involved especially the technicians.

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    Senior Member underground quester's Avatar
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    Default Re: Low Bids

    Quote Originally Posted by justanotherlocator View Post
    I have seen numerous comments/posts accusing companies of low bidding to get contracts. I am sure there are some that do that pretty consistently. But I also believe there are others that can bid low due to the economics of their company and footprint. For example, Locating Company “A” has a large telephone and CATV contract in Idaho. The major gas company then bids out their work and Locating Company “A” reviews the bid and determines they are already going to each of these tickets with their two other contracts. The financial wisdom is they can bid this lower due to absorbing most of their costs with the other two contracts & this gas company revenue could be very profitable even at a lower price. Then the power company shows interest and again Locating Company “A” is in a position to offer a lower (but profitable) price. That doesn’t mean Locating Company is “low balling” everyone just to get the work, it just means they are in a financial and contract layering position, to offer lower prices compared to a company who is new to the area or has smaller contracts. I just think this is something to keep in mind before accusing a company of low bidding and putting the profitability of that contract on the shoulders of the locators. Just some food for thought….
    And what happens when company A loses said profitable contract and are now stuck with lemons. Layering as a practice in my humble opinion is a receipe for disaster. Each contract should be able to stand on its own two feet so to speak IMHO
    Success is a journey, not a destination...

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    Senior Member AULupstate's Avatar
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    Default Re: Low Bids

    It's funny that we the humble field locators can see the ease at which things should be done. Kinda reminds me of those Nextel commercials. 'What if Utility Locators ran the world?'
    But alas we live in this world and our thoughts and ideas are circular filed and when the gravy train contract dries up everyone scambles asking 'What do we do now?'. Lay off from the bottom up, if that doesn't work just shut the doors on everything. Don't worry about the field guys, the next company will surely pick them up.

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    Moderator Goldenboy's Avatar
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    Default Re: Low Bids

    It's like all the utility guys in my area. They change their hats every three years when their contracts are up. The gas/electric company seems to go with a different company to bury their lines every three years but it's the same guys working. They just switch companies everytime the contract is up.

    Low balling contracts does nothing except for making the companies push production. Even though they don't use the word production anymore it's obvious that it's on the right up there with quality. It takes alot to balance the production and quality.

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    Senior Member yahoo's Avatar
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    Default Re: Low Bids

    whatever we will call (one company taking another company's contract)this idea......it hurts all involved in the end.....................even including the customer sitting at their house that has nothing to do with either company!!!!
    wise men talk because they have something to say and fools because they have to say something....plato

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    Senior Member RoadMap's Avatar
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    Default Re: Low Bids

    Amen!!
    If you are not a Liberal by age 20, then you do not have a heart! If you are not a Conservative by age 40, then you do not have a brain!!!

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    Senior Member Dave72's Avatar
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    Default Re: Low Bids

    But its the customer sittin in his house.. happy that he found some telco/cable/etc package for the lowest price... that motivated the telco to trim up some to make the bargain package, that motivated the field ops dept to tender out the locates to the lowest bidder etc etc

    Ppl line up to buy crap consumer things at Walmart (et al), then buy em again when they break, or arent shiny anymore. But its cheap.

    Of course, that locator from the above company is there too pickin up some boots and a box of nuke popcorn.. he cant go to the fancy places makin that kinda money can he.
    (May you live in interesting times)

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    Default Re: Low Bids

    "Glory Days they'll pass you by"

    It was like when the Baker's started SM&P back in Indiana and they were getting thirty to thirty-five dollars a ticket from Indiana Bell. Now you would be lucky to get that with a four or five way locate these days. It all about density or footprint. The more locates at one address the fewer the truck stops equals more profitability.
    And sure companies will lose a contract or two that's why it is called contract locating. You must keep your customers(utilities) happy or they will find someone who will. On the utility side it makes sense for them to try to negotiate a more favorable price for contracts. And I agree you get what you pay for, but that still doesn't mean they won't try to negotiate a lesser ticket price if they know they are the paying the most for your utility locating service. They are in the strongest position to negotiate.

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    Default Re: Low Bids

    Quote Originally Posted by Grievous View Post
    "Glory Days they'll pass you by"

    It was like when the Baker's started SM&P back in Indiana and they were getting thirty to thirty-five dollars a ticket from Indiana Bell. Now you would be lucky to get that with a four or five way locate these days. It all about density or footprint. The more locates at one address the fewer the truck stops equals more profitability.
    And sure companies will lose a contract or two that's why it is called contract locating. You must keep your customers(utilities) happy or they will find someone who will. On the utility side it makes sense for them to try to negotiate a more favorable price for contracts. And I agree you get what you pay for, but that still doesn't mean they won't try to negotiate a lesser ticket price if they know they are the paying the most for your utility locating service. They are in the strongest position to negotiate.

    AT&T pays $16 a ticket, when averaged out of the flat rate payscale. Verizon and Sprint also pay in this range in the SE? There are many contracts paying a reasonable rate, but bidding at a second rate price is why some of these utilities test the waters.

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