should you submit a price less than the construction project will cost you?

"Some construction companies are desperate to find work so they’re willing to accept any construction project, at any price."

Some construction companies are desperate to find work so they’re willing to accept any construction project, at any price. I’ve been in a similar situation before. However the risk of accepting a construction project at any price is that the company wins the project, works hard on it for several weeks, or months, only to lose money. How much better would it have been for everyone to sit at home, neither making money nor losing it? By not working on the project maybe the company would have had time to look for other more suitable construction projects? Maybe, by taking on the construction project the company didn’t have resources available to undertake a more suitable construction project when it presented itself?

"When a project is in trouble management spends more time on it"

​The risk of taking on the wrong construction project not only impacts directly on the profitability of that project, but it impacts on other construction projects and the company as a whole. When a construction project is in trouble management spends more time on it than they normally would, trying to rectify and solve the problems. This time could be better spent on maximising profits on other more successful construction projects. In fact, the absence of management on the other projects sometimes results in them also turning bad.

"Many of these projects end up costing the company large amounts of money."

​Working on a construction project should not be about being employed. The only reasons you want to be doing a construction project is so the company can make money, or occasionally so it can win further work which will make money. Frequently I see contractors win construction projects just because they’re desperate for work, or, sometimes contractors take on large and prestigious construction projects, believing it will enhance their standing with the public and their shareholders. Unfortunately, many of these construction projects end up costing the company large amounts of money - even leading to the contractor becoming bankrupt.
​#contractors #pricingconstructionprojects #projectbidding #constructionprojects

Information in this article is from 'Building a Successful Construction Company: The Practical Guide' by Paul Netscher. Available on Amazon and from other online stores.

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"If you decide to know the main principles of construction projects and companies this book is for you." Reader on Amazon

Other Useful Articles:
Don’t make a mistake when you price your next construction project
In construction it’s important to know your clients. It could save you.

​Paul Netscher has written several easy to read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
Visit to read more.
The books are available in paper and ebook from most online stores including Amazon.
© 2022 This article is not to be reproduced for commercial purposes without written permission from the author.