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Question DetailsAsked on 11/16/2016

Roofer i want to hire will not renegotiate his bid is 30% higher than 3 other roofers. He also has additional work

General contractor refuses to renegotiate large contract. Insurance claim for new roof and inside water damage. I really like this contractor however his bid for the roof is 40% higher than the other 3 bids. His overall markup is an additional 20%. All the companies are reputable and have worked in my neighborhood. This GC was referred by insurance company. This was a revisit by the insurance company, first claim was not right. This GC was with adjuster on second visit, we hit it off very well. I understand this is buisness however, I don't understand his unwillingness to renegotiate after seeing the other bids. He knows I want him to do the job, even giving more work from savings from the roof. I am willing to give him all the money I'm not trying pocket any monies. Should I just divide the job up, give him the inside, and give the roof to another roofer? Please help.

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If you really want him - maybe it is because he has great reputation and can get as much work as he wants - having been in that enviable position of turning away jobs I can tell you, it means he does not have to hassle with clients or "chase" after lower bids or necessarily agree to insurance settlement amounts (which are commonly agreed to by homeowners at 20-30% below proper value because they do not realize you can negotiate or dispute an insurance adjuster's damage assessment and claim amount).


If you have asked him to come down in price because of competitve lower bids, and told him those amounts, then he has probably properly identified you as a low-bid chaser - wanting the low bid amount but from the contractor of your choice, not from the one who offered the low price.


That is not how the system works, especially if he was representing you with the insurance adjuster during the second inspection. And at this point he is probably about ready to jump ship, and quite likely will if you do not give him the entire job and instead try to split his bid into two. (Which he does NOT have to accept unless indoor/outdoor parts were bid as separable options - otherwise he can certainly come back with a higher bid for the indoor work only than the proportional amount it made up of the overall combined bid for the larger whole job.)


Assuming you do not think he was in collusion with the adjuster (in which case you should strike him from the list and notify the insurance company of your suspicions), AND since this is an insurance job where it sounds like you have accepted the second adjusted claim settlement amount, I fail to see the issue, unless ....


You said "he was with the adjuster on second visit, we hit it off very well" - this almost sounds like that was the first time you met him - in which case WHY was he with the adjuster - sounds like collussion between adjuster and contractor ? Almost makes you wonder if the adjuster worked for the insurance company or him - which might have been the case if an independent adjuster or the "adjuster" was actually his salesman. If so, pay CLOSE attention to exactly what you have signed, and whether the insurance company is actually approving this amount for the work or if this is some sort of scam operation - just possible. Some storm damage chasers, in particular, have gotten VERY creative in providing forged insurance documents and even fake building permits and zero interest rate loan documents to try to get homeowners to fork over their deductible and any depreciation holdback amount, then they skip - though you say all are reputatble and have history in the neighborhood. The "he came with the adjuster and you hit it off well" thing rings odd - maybe just the way you said it.


You said you are "even giving more work from the savings on the roof" - exactly what savings are you talking about, since his roof bid is 30% higher than the others ? If you mean you are "giving" him more work with the money you want him to forgo on the roof - that is not "giving" him anything - it is asking for more work for the same $, no bargain for him.


Bottom line - his higher bid price may be because his work quality and reputation allows him to demand that much, or may be because you gave too much away by letting him know you want him to do the job so he feels you are securely hooked already, so he does not have to give anything up. Could also be higher because his competitors are small firms so the owner may work the job and not draw an owner's salary or profit like in a larger firm, or lower bids may be from companies which are not fully licensed, bonded, insured, etc. In my experience, throwing out the unreasonably low bids from weekend or summer roofers, the "reputable roofer" bids commonly vary by 30-50% between the small owner-worker outfits with an employee or two, and the "professional" companies with an office/shop building, dedicated company trucks, multiple year-around crews, employee benefit packages, etc.


You said "roofer ... will not renegotiate his bid" and also "GC refuses to renegotiate large contract" - are you talking a bid on a large JOB, or a contract that has already been signed and you are now trying to get him to renegotiate his price down to that of his competitors? You don't say if you signed a committment or assignment of claim document with him for him to represent you with the insurance comapony and do the work - it may be you are in (or at least he thinks you are in) a contract already, and just negotiating some changes to arrive at the final scope of work. In which case (assuming it said he gets everything the insurance company pays, plus your deductible and any amortization deduction), he already knows how much he is getting and any attempt to modify that on your part is your pie in the sky which he can ignore because you already have a contractual price (firm or fixed to insurance payment) so why should he walk away from 30% of that on the roof part ? In fact, if you signed a committment (VERY common with storm chasing companies, BTW) assujming it is legally binding you may not have the choice of splitting the job into 2 parts at this time - and if you do, it is "all bets are off" and rebid time anyway unless originally bid that way.


Or it could be you do not understand how the competitive "contracting game" typically works - for household size jobs (as opposed to large major project construction jobs, where competitor's price range does commonly come into play in terms of "guessing" what the competitors will bid and sometimes "buying" a job by dropping your bid to get the job for one of several possible reasons), each contractor works up what he thinks he needs to bid it for based on his operating costs, overheads, how much profit the owner(s) demand, and factoring in any need to fill an existing job slot or the ability to bid high because there is an excess of work - like after hurricanes and major tornadoes and such. Each submits his bid, usually (unless the homeowner it trying to get the contractors to bid against each other like it sounds you are doing) without knowing the other bid amounts, and genearally if in a bidding (as opposed to non-competitive price negotiation) gets or loses the job based on his bid. You win some, you lose some - and if you win many on price but are not making money you are probably underbidding - lose too many on price and you are overbidding either because you want too much profit or your operation is not cost efficient enough.

Answered 2 years ago by LCD

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Answered 2 years ago by Member Services




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