Ooops! I missed the last zero... Sorry!

So how does a million dollar contract in construction magically become a one hundred thousand dollar contract? Impossible? Nope possible, It does happen you know.

Many simple unforgivable, annoying and most importantly COMPLETELY avoidable mistakes I see made by small and large Contractors and Project Managers in the design build industry is one of the major reasons I switched this blog to also cover the design build sector. It seems people out there are making terribly costly mistakes and many times, from a simple failure to follow the rules. Many times, rules that are not complicated at all.

I have attended a countless number of bid openings, from both sides of the fence, as a contractor submitting bids and an Owner receiving the bids, sadly I have dump truck loads of funny, terribly sad and costly stories made during bid submissions. And another happened recently.

I thought Christmas had come out of season on a project when we opened the bids and it seemed a Contractor had decided to work for us for free... wow! Was it really our lucky day? Okay actually not quite for free but it would appear so based on what we saw and read. It was a bid for a project of a couple of million dollars, and as is typical in the public sector, it was a public bid opening with all bidders in the room for the bid opening.  After one of the bids was opened, the officer announcing the bids started calling out the bid number...
... base bid is, fifty million, two..., what? Hang on a minute, umm, there seems to be something missing...  from this number... a zero!??? Hang on...
As she said that, a voice from the bidder speaks up,
...Oh! That's me, ah yes, Oops! Sorry, no worries, I missed that last zero, yes, you are right, it is fifty million and...
A number of us were stunned. What? Really?? Sorry??? No worries you missed a ZERO from a fifty million dollar bid number???? Oh really? Just like that eh? Well I guess that is indeed not a big deal? After all, most other bids were indeed within the fifty million dollar range, so this most certainly was the case here, and we know what his real bid number is right?

Nope WRONG. Well sorry to say dear sir, your companies official bid figure is NOT fifty million but FIVE million... Oops! Yup, did you hear us correctly sir? You firm has indeed just bid $5 million dollars on a $50 million dollar job. And won't we be MIGHTY happy to award it to you! Oh you did not mean it, well you do realize it is right before our eyes in black and white...!

Now of course you should realize for most jurisdictions, there is probably language within the bid documents that refers to a bid being "responsive and responsible"  thus the Purchasing Director would of course end up ruling that a $5 million bid for a potential $50million project was not responsible, in addition, most jurisdictions allow a bidder to withdraw their bids within 24-48 hours after submission. But sometimes, there are strict guidelines that determine when, how and why a bid can be withdrawn, this is to ensure the bidding community take the exercise serious. But guess what? That company would have still ended up being the low bidder had one simple "useless" zero not been forgotten, I guess it was playing in the garden when the other zeros were summoned to the bid form!

So imagine that.  A company lost a good several million dollar construction project due to missing ONE ZERO. Keep in mind, this is FACT and not FICTION. For all you up and coming Project Managers out there. Please pay attention to these things.

 Having witnessed a high number of unnecessary bid day "bungles" I am almost at the point where I would advise a company to send the President or a Vice President to submit the bid. Or a much moreo senior person. As they are much more aware of the implications of making sure to dot all "i"s and cross all "t"s on a bid submission.

You will not be the first person, nor will you be the last that will need to submit a bid and going right down to the wire, you probably noticed, most of the other bidders did the same. It is standard in our industry. So that means you must have a bid day game plan. What you cannot do under ANY circumstance is make that kind of costly and unnecessary mistake. And I will not call this a rookie mistake as I have equally seen silly stuff from more experienced Estimators or Project Manager's.

Make sure to READ the Instructions to Bidders if you are the one submitting the bid even if you did not do the estimating. Also read the bid form and what / how it MUST be filled out. Sometimes, the priority will be placed on the bid number written out, other times on the bid number in numbers, and for some it will be the total derived from the addition of the various division numbers (this is going out of style due to the mistakes that are made). Also realize that jurisdictions differ in instructions on how these forms are filled and the valid bid number determined, so do not assume what you did with one agency applies to the other.

But whatever the case, make sure you READ, what takes priority on your bid number, and be sure that is the ONE number you get right. Can you imagine what might have happened to that fellow? How would he explain what happened? Did he keep his job?

Ah I should mention this, you might say that as it is obvious the number was meant to be fifty million, it would be unfair not to accept the "obvious" bid number after all we all make mistakes right!? First, the rules are to be strictly followed so there is parity among bidders on a level playing field, Secondly, yes it is possible that on occasion, a Purchasing Director might use some regulatory authority to revisit the matter, but in many situations, the second lowest bidder might (in fact is likely to) lodge a protest and will have a case saying the bidding rules were not followed.

In this industry, "Ooops!" and "Sorry" typically won't cut it, those are words we really try to delete from our Project Management dictionary!


Popular posts from this blog

Institutional Racism explained by an Ex-Batimore Cop

Being an effective mentor

An October full of trick or treat surprises