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    6 Replies Latest reply on May 17, 2009 2:27 PM by vnavguys

    Large Proposal Questions

    aacl2009 Adventurer
      We have an opportunity to bid on a six figure contract for a large company but I have a few simple questions that I need a seasoned person to answer. Let me say that our services include landscape maintenance and exterior cleaning (such as powerwashing). We will be working for a company that has 20 properties spread out between two states.

      Question #1: For large estimates is it expected that the proposed price includes all necessary taxes or should we list our price and show the tax as a seperate fidure?

      Questions #2: This would be a major step up for our company and we will need to put about $10k-$20k into additional equipment purchases. Is it unreasonable to ask for $20k upfront (upon contract signing) to be taken away from future monthly payments? This way we can get some money interest free as we would only be borrowing from our future profits. Of course there would be a cancelation schedule, in the event that the company chooses to terminate service they do not pay more than they would have had they not lent us the $20k up front.

      Any input from people with experience in large contracts is much appreciated.
        • Re: Large Proposal Questions
          BizSavings Adventurer

          Hello aacl2009,

          For question #1 I suggest that you show the total cost of the bid and indicate that it covers everything to include taxes. Anyone that's going to issue a six figure contract will look for what's cover within the contract.

          For question #2 This issue is more important than question #1 because it may cause the management company to believe that you are unprepared to handle large jobs or that you may have limited experience. While both of those assumptions may be incorrect, it may hurt your chances if another company has a bid that's close to yours in price, but doesn't ask for additional funds upfront if they already have the necessary equipment for large landscaping projects. ***Have you considered leasing the equipment needed?

          I hope that this helps you. Good luck with your bid!!!
          1 of 1 people found this helpful
            • Re: Large Proposal Questions
              aacl2009 Adventurer
              Thank you for your response. The first question I had no idea either way so you answered that question.

              For the second question I had similar thoughts as you, I was wondering if instead of approaching the deposit the way I did in the question, we could approach the situation as a comitment deposit. This way it does not seem like we HAVE to have the money but it is a way to guarantee service and show both parties are commited to making this happen.

              Or we could take the upfront approach of stating the fact that we are not currently in their state and to get a location established here in the two week time frame they are requiring we need these funds to make that happen.

              I would finance the equipment as you said but then we would have to buy new equipment (we prefer to buy used) or take out a loan (we do not have enough credit). Ultimately we are the only company bidding for the job and they need to make a decision by end of May (their words) so I feel that as long as our price falls into the reasonable range they have picked out in their heads we will get it. I just do not want to come across as unprofessional or small. Maybe someone has some advice for tactfuly addressing this matter?
                • Re: Large Proposal Questions
                  BizSavings Adventurer
                  Hello aacl2009,

                  It sounds like you're on the right path. Be as professional as possible and approach the process as if you were going to issue this deal to a bidder. The end of May will get here fast, try to determine as much as you can about the desired requirements to win the bid. Good Luck!!!
                  1 of 1 people found this helpful
                • Re: Large Proposal Questions
                  vnavguys Tracker
                  For number one, I would make the package all inclusive, everything including taxes. In essence you want to make it easy for the customer to do business with you.
                  For the second, if you are going to invest money, you need to make them sign a contract. It must be legally binding. You can find sample legal contracts all over the place. This way you are going to get paid and are not left holding the bag. Can they weasle out of the contract? Yes. Will they? Most likely not since they would have to get a lawyer.

                  Ken
                • Re: Large Proposal Questions
                  BizOptimizer Adventurer

                  Be careful on #2 - large companies know an larger bid contract is cheaper if the smaller bid contract requires fees up front. You need to find out what the "standard" is. The more "non-standard" your bid - the less likely you are to get it. That is, unless your non-standard is in their favor - but that isn't what you are looking at.

                  Equipment can be rented, bought in joint venture, leased, etc. Possible the outgoing company might have some equipment cheap! Lots of options there - your focus should be on what it takes to get the bid.

                  You are MUCH more likely to get that by discussions with the prospect than here. Generally, he who has the best inside contract had the proposal written for them and they have a good guidance as to what will win.

                  Good luck,