Bidding a job

[JohnSr]

I need some advice from some of you wise men out there that use their tractors to make money! I am finding that all I need to do is pull mine around on the trailer and people just start asking me "how much for this" and stuff like that. It's good because I really need the money right now!

I was recently asked by a General Contractor to bid on a small job on a farm. The farmer has a drainage problem on one side of his barn that is made worse by the HUMONGOUS Black Angus cattle (I cant help but see the outline of the roasts and steaks every time I look at them)! /forums/images/graemlins/wink.gif

They want me to use my Hoe attachment to dig a trench that is 60' long, 16" wide (bucket width), and 3' deep. Then drop in gravel, drainpipe and backfill. Then they would need some slight re-grading to make sure any excess runoff runs away from the barn which I planned on using my boxblade for. The material (gravel & pipe) will be provided by the GC.

I "envisioned" two 8-hour days and threw in an extra 4-hours to cover any holdups because of the conditions of the terrain. So 20 hours at $55 an hour. The GC seems to think my bid is way low and asked me to get some advice from someone in the biz before he accepts it (extremely nice GC trying to help me get started).

What do you guys think??? I have been searching the web all night trying to find a forum for "Dirt Work" or "Backhoe Service" and have found nothing. I am probably heading to the library later to find some books on estimating but would value your opinions above all.

Thank you for taking the time to read this and share your knowledge and experience.

JohnSr

 

[KiotiJohn]

I think that if the GC thought it was way low, you should double it. I haven't been in that same situation, and I don't do a whole lot of work for others, but I get $45/hour for brush work, and usually $55 for BH work, but in the situation you'll be in, I'm sure prices are usually much higher. I think double would make it about right. John

 

[JerryG]

I don't know anything about pricing in your area, but please call dig safe or what ever it is called in your area before you dig.

 

[rdln]

That seems like a well padded quote to me. My equipment sounds similar in size and I cant imagine more than 8 hours to do that. Is the ground frozen? How close can he get the gravel dropped off?

Well go ahead and up it to $1500 or something, It doesn't mean you have to charge that if the job goes a lot smoother.

 

[JimR]

My buddy gets $65.00 an hour under the table. He has a medium sized tractor with hoe.

 

[johan3400]

Remember this is a business. You would not be able to work every day of every week, so you must charge enough to make money for the idle days. Standard charge for man and machine digging either with a FEL or a BH in the midwest is $75 per hour. Figure 30% contingency time. The best plan is for it to take two eight hour day, what if you have a problem. You are repsonsible for repairs on your tractor if something happens. You need to pay yourself a reasonable wage. I have seen contractors bid low to get all the bids. They end up getting too much work and not being able to get things done on a timely manor. Be careful and make sure you bid to make money. This may start to be an income producing hobby, but it could grow into a business. You can always charge less than the bid price if it takes less time, but no one likes to be surprised with a larger bill.

 

[Henro]

I have aB2910 and BL4690 backhoe. Last fall I dug a 250' ditch, 3' deep, 16" wide for a sewer line that was going to be inspected by the county, and so I was careful to make it flat, straight and evenly sloped. Actually, come to think about it, it was actually 42" to the trench bottom, as I needed some stone under the pipe and it was supposed to be 36" to the top of the pipe. I think the digging time was between 10 and 12 hours, which equates to 20 to 25 feet per hour. So I would expect you should be able to dig your 60' of trench in 3 hours or less.

Dumping stone and laying the pipe in a drainage ditch does not take that long. Seems to me that working alone you should be able to be done with the ditch including backfilling in less than 8 hours.

Frozen ground would be a different story, as would be wet clay that sticks and does not fall out of the bucket. A bucket that doesn't self clean well really changes the equation. IF the clay is wet, my 16" bucket can frustrate me at times. It is tiring and wastes time cleaning the bucket with a digging bar, but it more frustrating going through the motions with the backhoe and not really moving much dirt in the process, even though the bucket looks real full each time.

Grading an area can be a different story, and I would be sure to understand the expectations there. Especially if you are giving a fixed price quote. I've spent a day or two moving dirt around at my place with the loader and box blade and afterwards wondered how it could have taken so long to do relatively little.

It would probably be wise to put your quote in writing, to be sure that what you are quoting is what the person you are doing the work for is expecting you to do.

These thoughts come from someone who has never hired out his tractor so keep that in mind... /forums/images/graemlins/smile.gif

By the way, something that worked real well for me was using some black electrical tape to mark the stick, so I would have a "measuring stick." I moved the bucket so the teeth were sticking straight out, put the teeth on the ground, then measured up 42" and wrapped a piece of black tape around the stick. Then when I was digging, all I had to do was put the bucket in the same position, touch the teeth to the ditch bottom, and look at the tape's relationship to the ground at the trench edge. I easily could tell if I needed to go a little deeper without getting off the backhoe or losing any time at all... This could be old hat or something you might try and see if it helps.

 

[DKinWA]

Sounds like a good easy money job. Around here, I'd say your bid price of $1,100 is in the ballpark, but I'm with Henro and think this shouldn't take more than 8 hours to complete. When I put in septic drainfields, I can usually finish one in a day with a laborer. This amounts to 240' - 270' of 2'x3' trench with 4" pipe and 12" or gravel. I should add, most of our soils are pretty easy digging with few rocks and other obstacles to slow us down.

If I was bidding a job like yours around here, I'd probably bid around $1,250 + tax ($125/hour or machine + operator = $75, laborer $50) and figure 10 hours or so to give me some extra time. Given we're talking less than 10 yards of material, I'd be bummed if I didn't have it done in 5 or 6 hours. If all goes according to plan in this case, I pay may laborer about $200 for the day and the rest goes to pay business expenses and my salary.

BTW, it sounds like the GC is a good guy and wants to make sure you get paid what you're worth. I'd definitely work on creating a good business relationship with him.

 

[AndyClyde]

</font><font color="blue" class="small">( <font color="blue"> so you must charge enough to make money for the idle days. </font> )</font>

Charge for work you never do ??

 

[Indydirtfarmer]

A few thoughts;

Are you buying the gravel or drine pipe? If so, it's expected that you will mark that up from 20 to 40%. (at least)

I recommend taking jobs by the hour if allowed, until you get the feel for bidding work like that. You and your customer are protected that way.

Don't make "some money". Make GOOD money. You'll have to replace that hoe one of these days.

Commercial work will pay more than residential work generally.

 

[bugstruck]

John, Your getting some good advice here and a bit of nonsense comment in my opinion. Let me go off tangent a minute.....If your working for a General Contractor in the State of Maryland you are covered under his MHIC liscence to do any residential work. Farm work may be exempt from MHIC regulation unless perhaps you touch the farmer's house. However, you still need a Maryland Contractors license which is the simplest of licenses to obtain in our state for non-residential work. Been awhile but I'm guessing it's $15.00 obtainable thru the Clerk of the Court in your County of residence. Additionally, if this becomes a business venture (already is) you need to get Workman's Compensation insurance. Any General Contractor who is REAL will request a Certificate of Insurance. Be careful because unscripulious Contractor's will suck new guys in, let them do the work, deduct costs for insurance the Sub doesn't have, inflate the rate, etc. etc. . Minimum Liability, Workman's Comp., and road vehicle insurance thresholds will have to be met. Not necessilary Maryland minimums, but those imposed by the General Contractor's underwriter. Gettin interesting now... As a sole propreiter you can waive your Workman's Compensation coverage (Owner only) but here's the problem; you will battle the State of Md. at every turn. Been there, done it. They can't stand sole proprietors who don't contribute to their cause. It's our law and but drives em nuts. With a "Contractor's license" you will be limited to Commercial work and work under a General Contractor on residences. To go homeowner direct it's Maryland State Home Improvement Commision License or bust. That's more involved and totally unrelated to your ability to do the work. It's all about sales regulations and your business knowledge. If you're up here I bet you can pass the test first go. Failure rate on the initilal test was over 50% last I knew. Don't underestimate it. Back to your question....

$1,100.00 may not be enough. Your contract with the General Contractor is Stipulated Sum the way it sounds. Your only recourse to collect additional $$ is if there is a Change Order to the Contract; assuming there is a written Contract, cleary defined work scope, and escalation clauses for unforseen conditions. If you're not under Contract, and additional work is required, you have to hope both the Contractor and the Farmer are good people who are not adverse to parting with money they didn't plan on spending. Don't know many of them.

Here's why you may need more $$. Amazingly, in this instance, the General Contractor could be right and some guys who operate tractors could be wrong. The $55.00/hr. rate is about right (maybe 65.00) for you and the machine only. Your total hours sound a little high at first blush but if I'm working in an animal trench I'm not in some flat field with known good soils. The work doesn't start and stop over 60' of trench. Did you look at the job and estimate it? That shouldn't be called out as a work scope line item (contract) but you need to be paid and recover something for time spent. Is your tow vehicle and trailer free of any costs? Certainly not. You need haul in and haul out fees on this. These costs are real and need to be added. Is this animal depression you are getting ready to excavate 100 years old with perpetual rainwater problems? If so, you may be amazed at the sad state or incredible compaction of the soil you remove. Your Contract needs an escalation/exclusion clause for; excavation material not suitable for backfill and for rock, among a few others. You certainly don't have rock excavation costs in here. You don't have overburden disposal costs for unsuitable soils should they be encountered. You don't have borrow material excavation and transportation costs in here to find good backfill if it's needed. Enough said.

I'd go at say $1,900.00, do a formal Contract (yours or the General Contractor's as long as it reads right) , get your Liability insurance and Contractor's license at an absolute minimum, call Miss Utility, and do the work. IMO Erie is the best Liability insurance around for your needs. You'll figure the balance of this out as you go. Just wanted to make sure you had your head up for the launch.

Best of Luck.

 

[AndyMA]

The $65/hr rate jives with what the excavating contractor I work for charges for a small machine. We try to take all work on an hourly basis with a minimum, plus delivery charge. If we take a fixed price contract there is always a clause about additional charges for ledge or other difficult digging conditions.

Andy

 

[bugstruck]

Andy, Exactly! I see you up here quite often with nearly always sensible comment. Like me I hope??? /forums/images/graemlins/confused.gif /forums/images/graemlins/smile.gif /forums/images/graemlins/smile.gif

After a second re-read.....Let me clarify the second sentence of the third paragraph of my earlier post. It was one short post who perhaps wants to one day.... operate a tractor. I should have said guy, not guys. Should have been more concise. /forums/images/graemlins/grin.gif

Anyway, I appreciate the response. John (initial poster) is a guy with a great question with no absolute answer. I want to see it work for him and I'm glad (not suprised) he is getting some good advise here.

Regards,


Enjoy,

 

[roccon31]

i usually get about 55 and hour plus travel time, depending on the part of town i am working in /forums/images/graemlins/wink.gif . most of my jobs have been bid so far, and i usually end up overestimating my materials and underestimating my time. i usually add at least 50% (of my cost) to the cost of goods sold. in my area there are ALOT of landscapers and property management guys. that leaves little room for profit. lucky for them, i work 60 hours a week in the asphalt business, and just use my tractor on my own sidework, so if i bid a job and get it, great! if not, no biggy. i WONT lose money on it, as most will do, just to get the work.

my biggest piece of advice i can give you is- bid the job so you WILL make money. if you dont get the bid, so be it. there is plenty of other work to bid on. you just have to give it time. if you are awarded 2/3 of the jobs that you have bid, you are doing better than most. if that becomes the case, then you should up your rates.

 

[bugstruck]

Put a first name in your user profile or your close. Nobody up here will hunt us down for that. Promise.

I used to get about 50% of what I bid when I was in business. Now that I've moved down the food chain (employee) I only get about 23% of what I bid. The rest of the team closes about 12% of their quotes. Now, I surface feed. If the company can't make respectable margins, I don't go there. I've also figured how to get the highest profitability (per job) in combination with the highest sales (contracts in our business). It's more art than science and once you figure it out your about 10 or 15 years from being useless (retiring). It takes that awful long unless your both lucky and gifted. Very darn few youngsters can go there.

Point being the larger you get, the more horsepower you should have in sales, the more $$ you should sell, and the less percentage of total bids you should be awarded. That's just how it works.... and should. That ain't even science.

See ya roccon31...

 

[keeney]

Job could also get interesting if you hit muck or sand that won't hold vertical sides on the trench - then you are going to be removing a lot more dirt, and how to put the rock back in over the top of the pipe will get tricky, or you will need a lot more rock.

I'd go with an hourly rate bid along with a good-faith estimate of the number of hours with assumptions listed and conditions that could make it take longer.

For the grading, I'd bid a fixed number of hours. Since there is no real good way to define when its "perfect", I'd spend that much time moving and smoothing the dirt and call it done.

- Rick

 

[roccon31]

i guess i should get a little more familiar with this type of forum. it is very different than the others i am on. i simply hit the reply button, not realizing i was replying directly to you. sorry about that. i was simply trying to give the thread starter some of my experiences as i am just starting out as well. i will be looking to branch out on my own in the next few years. i have ALOT to learn about the business world. i have alot of tricks of the trade, but the business end tends to bite me in the rear sometimes. what can i say, im new /forums/images/graemlins/wink.gif

 

[bugstruck]

Don't sweat it. The reply is often to the individual as a contribtion to the thread. Didn't know squat on this 4 weeks ago. I often reply to the last post which is not always what I should do. We figure it out somehow. I was commenting to your post, as part of the discussion. You're doing great! /forums/images/graemlins/grin.gif

FYI. I got my tail chewed on by one of the moderators on my third post. Didn't like my tractor buying exercise. You are exponentially ahead of me so far. It's a fun and wild world up here. Very glad to have you in the mix.

Don't be disuaded buy direct comment. It's a bit blunt here sometimes. Tractor guys??? Yeah, but in this day and world they must have done something right to even be here. Look at the BIOS. These are not average people. You'll like it here and I know you'll fit.

Regards,

 

[ksmmoto]

I am watching this thread close as I want to get into business with my tractor in the spring. Lots of good advice. Not directly related, but when I worked in Tool & Die they only won about 5% or less of their bids. Better to go high and not lose money I think.

ksmmoto

 

[JohnSr]

Thank you all for the great replies. Again I am in awe at the wealth of knowledge being shared on this forum.

I am telling the GC to "pad" my original quote as he sees fit since he feels it is necessary. If I were dealing with the homeowner directly I would provide a written "Estimate" that would have clauses that covered me in case it took longer because of the conditions. I do plan to walk over the site with the homeowner before I do anything to explain my plan of attack so he will know what to expect.

In this case, there are some conditions there that concern me and might help explain my original quote to those who thought it might be a little high. If the soil were dry and packed I am certain that I would be done w/ the trench in a few hours but it is very wet and "never dries" completely. When I walked it off with the GC I felt like I was walking on pudding! Judging by the mud marks on the cows legs their feet are plunging over a foot down. So I anticipate the grading to take the longest and to be the most challenging. I obviously will not try to trench in mud so i am scraping until I can trench and may end up having to bring in some more suitable soil for the area where the drain tile is going. These conditions were caused mainly by the rainwater from the barns gable roof. When it rains the dripline gets pounded. I was planning to run the gravel all the way to the surface along the dripline to help prevent erosion and to encourage the water to get down into the drain tile to eliminate the mud bogging effect.

I already have my license from the county, did that immediately after incorporating. I have been shopping for G/L insurance and will get that soon. I want to get my MHIC so I can go direct to homeowners but I have to wait on that one until I get more funds built up.

I am going to post before, during and after pics in the projects section when I get it started. I will post a note to the end of this thread to notify those interested. Could be quite entertaining!

JohnSr