Bidding vs. Negotiating Your Dental Office Project

By October 18, 2011Dental Construction Blog

Here’s a conversation I’ve had with a number of doctors:

Doctor: “I’m thinking of doing a project in the near future.  Would you like to give me a bid?”

Me: “No.”

Doctor: “…..(long awkward pause) what do you mean ‘no’…”

I then proceed to explain that Primus does not “bid” on a dental office projects.  Our dental projects are “negotiated”.  From there I continue to explain what I mean by negotiated.

Not too long ago I came across an article written by Jeff Carter and Pat Carter of PDG-Practice Design Group that discusses the pros and cons of competitively “bidding” versus “negotiating” your dental office project.  I thought I’d share their thoughts with you.

To summarize, most dentists want to be sure they have several elements in place when they build their office:

  • the best general contractor (perhaps LOTS of dental experience might be important here??)
  • great craftsmanship at a fair price
  • Minimal or no change orders (see Our Guarantees #4 and #5 for more on how we ensure this)
  • Your office gets built as it was designed
  • Cooperation between the project team members

As the article states, with the competitive bidding process you select your building based on price alone.  You can’t be sure what corners they may have cut to arrive at their apparently low price, and in almost every case the only opportunity for savings in your project is by removing or significantly altering parts of it.  “Lowest price” general contractors ONLY bid what is shown on your plan, and if anything is left off the plan or not clearly specified (which is true in all drawings–no plan set is perfect) the GC will issue a change order to cover these added costs.  Hard bid projects are built according to the GC’s ‘lowest interpretation” – and if they are only concerned with winning the job believe me they will make CHEAP assumptions to secure the work, then ask questions later.  The quality of the GC’s assumptions is crucial to the quality of your project.  Once you truly discern their assumptions, every upgrade or change is an extra – oftentimes up to a 25% increase in your project cost!!  For a typical 2,500 SF buildout that’s over $60,000 in overages that you’ll have to come up with a way to pay for.  If your financing is already finalized, this may need to be paid out of your pocket directly!

As the article also explains, negotiation is the preferred method for building something as complex as a dental office.  You select your builder or design-builder based on a interview process.  There is ongoing and cooperative interaction between the design team, the doctor, and the GC.  The design team and the construction team interact, and any cost reductions are discussed as a group.  All reductions and changes are negotiated until a final cost is determined.  The general contractor is being fairly compensated for his work and his fee has been discussed–therefore there’s no need for him to try and recoup lost money or improve a slim margin. With negotiated projects the GC or design-builder in incentivized by the prospect of your referral to finish on time and on budget, and change orders are often less than 5%.

The negotiated approach to building dental offices is the only way to ensure the quality, integrity, schedule and budget of your project.  Again, in our case we guarantee the schedule and the budget, and will compensate you if we fail in either area.

To read the entire article click here.



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