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FROM THE WORKROOM
Understanding Commercial Jobs
Here's what you need to know before the bidding starts.
by Mary Ann Plumlee
In order to enter the commercial market we must understand that all commercial jobs are not equal. Commercial jobs can come from different sources and can come with varied requirements.
For example, some commercial jobs are similar to residential jobs. Other than working with a business rather than a homeowner, the process and requirements can be the same. For many small businesses that require window coverings, whether they are soft coverings or hard coverings, the same treatments that are used in residential settings often are adequate with no special considerations. Some requirements, such as architectural hardware, may not be necessary in all situations simply because the jobs are thought to be “commercial” because the products are being sold to a business.
One avenue for doing commercial work on new construction is to enter the bid process through a general contractor or construction management company. A general contractor is a builder who specializes in commercial construction. A general contracting firm solicits bids from subcontractors for each portion of the work to be done and adds profit on top of the bids received. Several general contractors may bid on a particular project. All will take bids from subcontractors and add a profit margin to determine how much money they require to build the project. The general contractor that comes in with the lowest price bid is most likely the company that will build the building.
A construction management firm differs from a general contractor in that the construction management company works on a cost-plus basis. When talking with a general contractor during the bid process you may or may not be talking to the actual company that will do the work; therefore, it is important to find out which general contractors are vying for the project so you can submit bids with all of them. With a construction management company, it is understood that they already have the job and are just looking for subcontractors.
WHERE TO START
In order to be included in the bid process, window coverings companies have to be aware of the projects early on. Knowing when the projects are put out to bid and which general contractors will be bidding on the projects allows you to become a player in the process. The Association of General Contractors (AGC) is one organization that provides this information. The AGC sends out a weekly newsletter to members announcing upcoming projects. This information includes which divisions of work will be involved, which general contractors will be accepting bids, and when the bidding will close. The AGC provides a plan room at various locations where subcontractors can go and study architectural plans. Visiting the plan room, studying the plans, and determining what is required by the plans is called doing a take off.
Architects and interior designers draw the plans that tell exactly how the building will be built. An architect’s main responsibility is to draw the exterior walls and make certain that the building is sound. An interior designer often does interior space planning and so is responsible for drawing the interior walls. Each architectural firm seems to have its own style of drawing plans. It’s often a challenge to find exactly what is expected because plans vary from architect to architect. Some will give all of the information in a form that is easily understood, while others tuck vital information in hard-to-find places. So it is important to study the plans thoroughly.
Plans consist of large sheets of paper that show drawings of the building. Each section is specifically for certain categories of subcontractors. For example, there will be a site plan that tells how the land must be prepared for the building. There will be a section for HVAC, which tells the heating, ventilating and air conditioning subcontractors how to proceed, as well as other sections such as plumbing and electrical.
The section that pertains to window coverings is the architectural pages. These pages will have floor plans that show all of the windows and also denote the different types of windows. All windows that are the same will be labeled with the same notation (often a letter within a hexagon symbol.)
The architectural sheets also show the exterior elevation. The exterior elevation is a drawing of the outside of the building from all sides. The exterior elevation drawings are important because they help confirm the window count. For example, if the building has multiple floors, that fact will be clearly evident by looking at the outside drawing of the building. It is of utmost importance to accurately count all of the windows before bidding.
There will also be a book associated with the plans. This book is called the specification book. The book will be divided into divisions. Each division deals with a particular trade and applies only to those subcontractors. The division that pertains to window coverings most often is the furnishings divisions, which is 12500. Knowing this, you can go directly to your division to look for specific information pertaining to only your trade.
Another important aspect is addendums and additions. As a plan is used for the bidding process, errors are often found and corrections made by the architect. These corrections are sent out as addendums. Additions sound similar, but they are different. An example of an addition would be this sentence, “We want to build this main building, but if we like the prices we might add on this other building out back as well.” You must be aware that your bid might need to reflect that you are aware of the possibility of additional work.
SUBMITTING THE BID
Often the general contractor will look for the subcontractor submitting the lowest qualified bid. Qualified means the subcontractor making the bid is a company that is known to be able to adequately fulfill their contracts. If, for example, a subcontracting company made a bid that was substantially lower than other submitted bids, it could be because the subcontractor (sub) had failed to consider the true scope of the work and had left off a portion of products to be provided. The general contractor may then choose to disallow that bid and write a contract to a sub with a higher bid.
When submitting bids, it is important to qualify your bid. Spell out exact quantities, sizes and specific products that you plan to use. Often the plans will allow for several different brands of products and the sub is allowed to choose from that list. For example, the plan may say horizontal blinds from Graber, Hunter Douglas and Levolor are acceptable. There also may be a clause that allows for or equal products. This is an indication that the architect might be open to accepting a substitute product from a company other than those listed.
The best plan of action is to bid using pricing for the most expensive brand (often the brand listed first) rather than hope that the architect will accept a substitute. By spelling out exactly what you plan to do, you are giving the contractor an indication that you have a full grasp of the scope of the work.
For example, if your window count is skewed as far as the other bidders are concerned, then the contractors needs to know that you are including too many blinds, or too few, and your pricing reflects that. He may come back to you for an adjustment in pricing.
If you find that you are the low bidder and you have won the right to do the work, you will be awarded a contract from the general contracting company or construction management company. Understand that you are promising to fulfill the requirements of the contract. If you have failed to understand the scope of the work and will end up losing money on the contract, that is something you should have determined before committing to the work.
WHAT ELSE YOU NEED TO KNOW
Insurance requirements for subcontractors are specific. Before becoming involved in bidding on commercial work, find out if you carry the required insurance. If you do not, then you will be required to purchase the proper insurance. This insurance can include workman’s compensation, general liability with the general contractor listed as an additional insured and even high-dollar coverage on commercial vehicles.
Also, you will need to understand the financial aspects of doing this type of work. You must have the money or credit to be able to finance these jobs. Payment is done in a process that must be understood. Paperwork has to be filled out correctly and submitted on a timely basis in order to be paid. While you often can be paid partially as work is completed, you must understand that if you miss a payment cycle, then there is no recourse other than to wait for the next cycle to be paid.
These jobs also require what is called a retain age. This means that a portion of your money will be held until the entire project is completed and all bills have been paid. Often subcontractors will have the lion share of their profits tied up in retain age money. This means that subcontractors must be financially prepared knowing the process before they ever become involved.
Commercial jobs can be very satisfying and profitable. It is nice going into a job knowing exactly what is required beforehand. Being able to advertise that your company worked on a major building in town can be a boost to your portfolio as well. However, entering commercial work is not something to be taken lightly and should best be entered doing small jobs in order to learn the ropes with less risk.
Mary Ann Plumlee is the owner of a retail and wholesale workroom. Starting with only $50 and a home sewing machine in 1985, her business has expanded to include a showroom, 12 employees and two locations. She firmly believes that in this business only the tough survive. Finding the humor in the everyday life of a “curtainlady” is how she not only has survived, but thrived in this industry. Plumlee is often seen traveling around the country teaching classes and seminars. She is the author of The Adventures of Curtain Lady and has launched a workroom related blog: www.workroomintelligence.com. |
