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#190710 - 12/01/09 07:41 AM Bait and Switch?
renosteinke Offline
Cat Servant
Member

Registered: 01/22/05
Posts: 5299
Loc: Blue Collar Country
A couple of discussions recently have led me to ask: can an EC perform the 'bait and switch' scam on a customer?

I'm thinking of the situation where, for example, the customer plans to build a laundromat; absent specific plans, the EC submits a bare-bones quote, with just a few receptacles and minimal lighting. Everything sails through plan check - then the customer suddenly figures out that the design is inadequate.

Sure, the EC says ... but that's extra.

IMO, this is an unethical practice. The EC has made his price appear 'low' as compared to anyone who bid assuming a reasonable installation. With the 'change orders,' the 'cheap' guy suddenly isn't such a bargain.

What do you think?

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Business, Office, Estimating, Legal:
#190711 - 12/01/09 08:43 AM Re: Bait and Switch? [Re: renosteinke]
A-Line Offline
Member

Registered: 07/23/04
Posts: 264
Loc: Utah, USA
I think the customer needs to pay someone to engineer or design the electrical for the laundromat.

If they want me to do it they should pay me to do it. Engineering or designing the electrical for their project should not be included in a free estimate.

I went to bid a restuarant. I get there and a guy shows me a basic floor plan with no electrical. He starts pointing that restrooms are going over there, the grill is going to go over there, there will be an ice cream machine going over there, table and seating over there, a salad bar over there, etc.

He wants me to give him a free estimate based on this?

I told him to call me when he has a set of plans drawn up with the electrical on it showing what equipment will go where and the electrical requirements for the equipment.

I'm not going to engineer or design his project for free.

If the customer wants a design that isn't inadequate he needs to pay someone for it before putting it out for bid.

Free estimates shouldn't mean engineering or designing the customers project. If he want's the EC to engineer or design his project he should be getting bids from the EC for this.

If the customer is too cheap to pay for someone to properly engineer or design the project than he deserves what he gets.

If he pays someone to engineer or design his project and it's not adequate than that should be between him and the company he paid to engineer or design it.

If I'm bidding a project and I see by the plans the design is not adequate I'll point it out to the customer. If he want's me to re-design it I'll do it for a fee, otherwise I'll submit my bid based on the plans. I will also have him sign something stating that I pointed out that I felt the design was inadequate.


Edited by A-Line (12/01/09 08:47 AM)

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#190714 - 12/01/09 10:54 AM Re: Bait and Switch? [Re: A-Line]
HotLine1 Offline

Member

Registered: 04/03/02
Posts: 6785
Loc: Brick, NJ USA
To get 'by' plan review here (NJ), any comm job requires plans by a lic. PE/EE/Architect. (Period)

There are instances where I can accept minor plans from an EC for comm, but stress the word 'minor'.

A few EC's will do a layout for a tenant fit-up, and submit that to the EE/PE/Arch which could provide a cost saving to the client, but I hope the EC gets $$ compensated for his time.

There were many, many jobs that I provided layout & quote for, and never saw the job; hence a fee was attached to the paperwork.

Again, client relationships count heavily for doing this service.
_________________________
John

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#190716 - 12/01/09 11:11 AM Re: Bait and Switch? [Re: renosteinke]
gfretwell Offline

Member

Registered: 07/20/04
Posts: 9012
Loc: Estero,Fl,usa
I don't think there in a problem with a bare bones proposal but it should be clearly disclosed that this is the minimum code requirement and may not be everything they will want. At least that gives the customer a heads up that they may actually need to spend more money.
90.1(B) says it all.
_________________________
Greg Fretwell

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#190717 - 12/01/09 12:01 PM Re: Bait and Switch? [Re: gfretwell]
mikesh Offline
Member

Registered: 06/07/06
Posts: 614
Loc: Victoria, BC, Canada
Without a good plan and specs the contractor is starting with the minimum that meets code. The customer shops by price and thinks it is a Ferrari he is paying for. Hey bad planning does not get a reward and the contractor is not unethical because he bid based on code and not a plan,

My Humble opinion.

It can be to the benefit of a contractor to show a bare bones pass inspection price and then up sell features according to the customers desires and budget but I don't think it is unethical to offer the bare bones where there is no plan or spec to bid on. I know customers can be pretty ignorant of codes and even budgets but how does a contractor become responsible for educating every customer? A good plan has no extras and a bad plan can cost the contractor regardless of extras.
I worked on a big job for Department of National Defence. There was a plan but it was so bad that there was 105 electrical change orders. OK you are thinking we should have made a killing but think of a building the size of a football field where ever time you organize a work flow the general stops work for a change order. Your crews are spending more time re-tasking and all the Foreman's time is spent getting the estimator information and trying to find any way to accomplish something that will get the job closer to a final. Change orders can have a huge impact on the orderly progress of a job. there are costs no estimator can fairly price so that the total impact is reflected in the change order price. On this project the plans were all but useless and even after all the change costs were factored in the company was $135,000 over costs. After some hard negotiation with an expert in change order impact the company managed to get $85,000 more out of the Federal Government but if you do the math the company wound up supporting the defence department to the tune of 50 grand. No one was given a civilian medal for this.

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#190723 - 12/01/09 05:43 PM Re: Bait and Switch? [Re: mikesh]
Rewire Offline
Member

Registered: 02/23/08
Posts: 167
Loc: Missouri
The last guy to send me just a floor plan to bid I sent him a quote for $250.00 he called back asking if it was a typo and I said no $250.00 is what I will charge to go to his site and he can show me were he wants everything so I can give an accurate bid.

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#190726 - 12/01/09 07:48 PM Re: Bait and Switch? [Re: Rewire]
Jim M Offline
Member

Registered: 08/10/01
Posts: 453
Loc: Chestertown, MD, USA
John, you know my ethics. However, I feel that in order to even come close on the bids you almost need to bid the minimum. If you do more your price will be inflated even though you have gone to the trouble to provide more than minimums and have added value through intelligent design. Does the customer know that your price already includes most or all of the future extras from another contractor. I don't think so, unless you can instill upon them the benefit of using your services.

Providing a detailed estimate and taking the extra time to value engineer also costs you additional time that you may not recover if you do not get awarded the job.

I too have lost bids by adding what the customer was going to ask for but did not know enough to express during the bidding. I was called by the customer and asked why I was several thousand higher than the other bids. I took the time to explain that the others may only have someone that could only connect the dots doing the work and may have someone check there work vs me doing all the work. I also asked questions about furniture placement, extra switching etc. I also showed examples of the recessed fixture trims that were standard versus the cheap trim rings that allow you to see up into the housings. All these thing work against someone that wants to provide a decent product for the price given. Just another example of the old adage about quality while the low price is forgotten. OK, so I don't have that quote exactly right, but senoir moments happen.

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#190727 - 12/01/09 09:11 PM Re: Bait and Switch? [Re: renosteinke]
leland Offline
Member

Registered: 08/20/07
Posts: 856
Loc: Lowell area, Ma. USA
Happens every day, for ever.
wire to code. i've lost jobs for the reason of fore thought. Builders don't want that. wire to code then add the extras.
everybody gets a cut.

Do i agree? no way. but in this economy,it is more prevalent than ever.

Bare bones (period).

bait and switch..? Thats up to debate. I suppose it depends who is the 'customer', Builder? or end user.

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#190802 - 12/05/09 04:42 AM Re: Bait and Switch? [Re: leland]
Tesla Offline
Member

Registered: 06/16/04
Posts: 1280
Loc: Sacramento, CA
Bidding per plan is not bait and switch.

If you are going into Design-Build then you must have the contract documents to support it and a customer who trusts you enough to build efficiently.

You CANNOT take a HARD-BID mentality into D-B. They are two different worlds.

Buy using YOUR engineering talent some (soon to be) poorer EE is being cut out. Those dollars must now flow to you. BTW, you will not likely be as efficient as an EE as you think. Being an EE is a whole different world from being an EC.

The terrible business climate is causing everyone to go a little bit crazy -- on the way to bankrupt.

The design neutrality of an EE's plans allows GC's to place the project out to random bid. The bidders, without any design input, can't be accused of rigging the game.

If you are going down the Design-Build route then you must permit the GC to have a second negotiation with regard to extras and deletions. Typically, a job specific (ie the contract at issue) cost structure must be maintained by the EC. Adders and subtracters are then factored into the baseline bid. The D-B EC is permitted to make a profit, but is not allowed to make a killing.

I must say that I've never seen D-B full rituals used for something as simple as a TI. But the industry is now running most of the commercial action in this format.

Perhaps try cost-plus...

////

More generally all of this is symptomatic of too many players and not enough action.

Meaning that winning such contracts may well equal losing one's business.

It's much better to focus entirely AWAY from such hyper-competitive bids and perform service work.

At least you might survive.

All principled low-ballers will go bankrupt.

BTW, such clueless GC's indicate where THEY stand on the totem pole of construction economics -- and that's on the bubble.
_________________________
Tesla

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