Bid Spread
We are sitting in 2nd place after the low bidder got out and the third bidder was DQ'd for something.
With respect to the numbers - here is why they varied dramatically. 1.) Some bidders don't self perform asbestos abatement and had to rely on a few select bidders for abatement -the lowest street abatement number was around $1.2 million, 2.) Some bidders also don't have sheet plating laying around for a small cofferdam that was to be built - which added $200,000 to most bids, 3.) Many bidders don't have experience taking down power plants, & 4.) the largest factors was the estimate of scrap on the site - some said 4,000 tons others had 8,500 tons - our estimate was around 6,000 tons.
Once you came to a conclusion as to how many tons of scrap then it was how brave you wanted to get, because who knows if the scrap prices would be as high in 4 months. So personally what we did was figured it wouldn't drop below $200 per ton so if it did we had a profit we were comfortable with regardless of getting the scrap. If it stayed high obviously it would have been a great job.
The one number way out of whack was the negative. Because even if there was 7,000 tons and it stayed around $400 per ton he would have costs of around $2.5 or $2.6 million + (-126,000) - so in reality he would make at most $200,000 after a year of work. In that he would basically finance the entire job (asbestos, fuel, equipment, labor, etc) for the entire year. Big risk.
The final comment is that some contractors may have been busy and just increase their number because of that. For example I think the correct spread was in this range -$875,000 to $1,500,000 for the bid. If you were over that either you were busy, you had no experience in power plants, you couldn't estimate scrap.
Hope that helps.
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