Surprising bargains may look good now, but low costs and loose practices can bury your project
Excavating a site is a big job, and big jobs attract plenty of bidders. A healthy number of offers can benefit a project as contractors seek to present the best deal. This can spell savings but can also sometimes be a threat to the quality of work provided. The adage “You get what you pay for” is common currency for good reason. Here’s what to consider when sizing up a bidder.
Beware the lowest quote on an excavation project
Excavation can be a huge job in terms of scope and importance. Clients will naturally want to keep their expenses low so the bidder who costs the least is obviously attractive. A very low bid, however, is often a red flag of a risky firm.
Even when competition is fierce, a seasoned contractor won’t underestimate the time, materials, or manpower required to do a quality job. Paying for each of those should show in the bid figure. It will also be evident in a professional result after the job is done. How can a customer get a feel for a “too low” bid? It will typically have a margin that’s too good to be true. For example, if most quotes are around $10,000 and you’ve got an offer for $6,000, you should think twice and examine the bid closely.
Low bids also have a nasty habit of climbing once a job begins. A reliable firm will take its time to factor in every possible expense before offering a price; an unreliable company will quote what it takes to win the bid and start adding costs as they go. If they can’t competently manage their cash flow and projections, you can bet your project will be handled the same way.
The harshest cost of cutting corners
Risky bidders often seek cash payments which can signify tax avoidance or, worse, having no insurance. This puts more than the onsite team and your property at risk. If anybody is hurt on the job, an uninsured contractor makes you liable for the related costs. This is something to seriously consider with excavation, which is one of the most hazardous tasks in a dangerous industry where injury and death cost almost $13 billion annually, in addition to the human toll.
With all these risks in mind, when accepting a new bid, what coverage and credentials should contractors carry to protect everyone’s interests?
What a contractor needs to operate legitimately in New Jersey
Proper licensing, bonding, and insurance marks a contractor as being held to their own high standards and those of a governing body. A few key areas that a firm should be insured in are:
- Primary general liability insurance: This provides for services and compensation which arise from any negligence on the contractor’s part.
- Lead umbrella liability: This provides coverage to the other policies and protects the contractor under any and all circumstances.
- Worker’s compensation: This provides compensation for an employee who has been injured on the job or has become ill and cannot perform their assigned duties.
Never take a bidder at their word about insurance. A quick check of their website or media presence should show them clearly providing their credentials. This isn’t just a matter of pride, it’s often legally required that a contractor prominently display that they’re qualified for the job.
For legitimate contractors, there’s no way around the rules
The Department of Consumer Affairs views no insurance as a deal breaker if you want to be a licensed contractor in New Jersey. It’s impossible to complete the process without providing your insurance number and a copy of your policy.
It’s equally vital that your chosen firm has a Contractor License Bond. This is designed to protect the public from frauds and rip-offs and to ensure compliance to state standards on the part of the firm. If a bidder cares about their livelihood, their employees, and their customers, they’ll make it their business to be properly licensed and insured.
Excavating has been our business at Mikula for more than 70 years. Contractors in New Jersey are licensed at the city or county level, but we took it further to be fully insured and certified throughout the state. We’re proud of the fact that every one of our operators is OSHA qualified and that the combined experience of our team amounts to more than a century of skill.
We apply this expertise and care to every project we’re part of. Don’t immediately pick up the tab on low bids – check them out thoroughly. And if there is any question, stick with reliable work for a transparent price.
Mikula Contracting, Inc. provides commercial and residential customers with a wide range of excavation, demolition, environmental, snow removal, trucking and soil materials services. For more information, call 973-772-1684 or email firstname.lastname@example.org