An electrical contractor’s most difficult task of a telecommunications cabling bid is preparing the costing. This is because numerous variables must be included in the pricing, such as: the competition, determining labor units, testing and certification requirements, manufacturer certifications, incomplete design specifications, non-standard bid packages, and materials cost.
When preparing a response to a telecommunications cabling bid, first investigate the local labor market to determine the typical labor rate. If the project is non-union, you will probably notice a large range in rates, typically from $40 to $75 per hour in one area. If possible, determine your competition’s labor rate for the bid that you’re responding to. Then you can decide if you can be competitive with your labor pricing.
If you decide to continue the process, your next step is to determine your labor units for the required tasks of the project. An easy method of doing this is to develop a spreadsheet that includes all the tasks and materials required to complete the bid package. This allows you to manipulate items to see their effect on your pricing. Telecommunications cabling projects are estimated and evaluated by the cost it takes to cable a work area for a project. Try to find out what the going rate (total project cost/number of work areas) is for a work area in your area, then use the spreadsheet to tune your bid. It is not uncommon for a telecommunications cabling project to require both fiber and copper cabling. You may want to develop a separate spreadsheet for each type of media.
Testing and certification has become standard for most telecommunications bids issued today. Unfortunately, most of them are based on a particular manufacturer’s requirements. If a manufacturer’s certification is required, ensure that you have one or are able to obtain one before submitting your response. The cost of certification and testing has to be factored into your bid response.
You must make certain that you understand and have the test equipment to comply with the requirements outlined in the specification. If you do not have access to particular test equipment, most of it can be rented. If the bid does not require testing and certification, it is a good idea to do it anyway for liability concerns that may come up in the future.
It is not uncommon to be required to respond to an incomplete and/or non-standard bid package. Since a professional engineer does not issue many cabling bids, the issue of liability comes up. If a professional engineer does not issue the bid, the liability for both the design and build of the project may become yours. If this is the case, you may want to consult an attorney before submitting a bid response. Whoever wrote the bid, if it is incomplete, note to the best of your knowledge its errors and omissions and submit them to the owner. This will reduce your liability and provide an opportunity for extras.
Probably the most difficult item to determine when responding to a telecommunications bid is materials pricing. This is a double-edged sword; you have to be concerned with obtaining the best price from the distributor and submitting a fair price with the bid response. One of the best ways to get the best price from the distributor is to contact the manufacturer’s representatives for the materials you need. Since you will not be the only contractor to do this, it is a good time to have sales skills. The other edge of the sword is determining the materials markup. Careful consideration must be used here, since it is not uncommon for a telecommunications contractor not to bid labor only without mark-up the materials. Therefore, you should investigate your competition’s bidding practices before completing your bid response.
Telecommunications cabling is a multi-billion dollar industry with unlimited opportunity for those who participate in it. Unfortunately, manufacturers control this sector of the electrical industry, which typically has no controlling authorities to regulate it. Though it may be unconventional and require a different approach to bidding, it is becoming critical for electrical contractors to participate in this industry.
SCHECKLER is a teacher, trainer, and estimator who specializes in VDV bidding and estimating. He can be reached at (760) 754-9129 or firstname.lastname@example.org.