34. ___Identify key subcontractors that we need to count on for MBE/WBE participation or primary subs that won’t bid to us that are bidding the project. If we don’t have an existing relationship with them, then go out and meet with them. This will establish the foundation for a relationship and it will be a catalyst for building trust. 35. ___If MBE/WBE participation is required; prepare a matrix with several different options to determine the lowest possible cost combination to achieve the requirements and to insure you have enough coverage. It is essential that if you are receiving MBE/WBE participation from a second tier sub from one of your prime contractors, you need to know the premium associated with using them if there is one. You may be able to meet your over all goals without having to use this subcontractor thereby having the lowest possible cost participation. 36. ___Have self perform give you a number at cost for the carpentry, demolition, painting and drywall. Evaluate where the rest of the subtrade market is and then adjust the number up creating your fee in those line items while still leaving yourself with a competitive advantage over the rest of the market. 37. ___Create a joint venture or more preferable, an LLC relationship with another General Contractor. The opportunities are as follows; eliminates a competitor, share in the bonding, if there are MBE/WBE requirements you can Partner with one of those firms to meet the requirements so you don’t pay a premium in your trade costs, self perform work, opportunity to enter into new markets or regions, take advantage of their relationships, firms having different areas of expertise, etc. 38. ___Send our scopes of work out to the sub contractors as soon as possible even if we know their will be slight revisions. This will cause the sub community to price the job the way want it priced and not the way our competitors want it. This can also lead to a cost advantage strategy. We can have subs include items we know we will pull out when bidding or buying the project. This means we will need to have the value of that item as a negative plug number on our bid day scope sheet. 39. ___On bid day you may be able to negotiate a better price with the subcontractor if you offer to pay them within 15 days of an approved pencil draw. This will need to be preapproved by the market VP/PX ahead of time and then only on certain subtrades. 40. ___If you are bidding a series of prototypical projects and loose one of them, have your preferred subcontractors call your competition to find out what the low number was they used on bid day. (i.e. your HVAC sub can call to negotiate for the project and ask how their number stood on bid day, how far off were they. This could give you an indication of the number they had so you know if they cut a deal on bid day, there was a subcontractor we didn’t know about etc.) 41. ___ In addition to going to subs that will normally give you a complete price, identify individual subcontractors that will do a portion of the trade item such as ventilation, mechanical piping and temperature control. You can buy them separately and avoid costly markups on second tier subs. Compare your assembled price against your all in sub number to determine the lowest possible cost.
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