How I Screwed a Painting Subbie Down $13k With One Phone Call
Builder-side confession. Back in my contract administrator days I took $13,000 off a painting subbie's quote with one phone call, using the oldest tactic in the industry: "the other subbie came in cheaper, can you match it?" Here is exactly how it works, why you can't verify it, and the two tells that show you're already in the running before you drop your price.
Transcript
How I screwed down the subcontractor for 13 grand. Back during my builder side CA days I worked for a commercial builder. We were building a commercial project. Our office was in north Brisbane but the project was in south Brisbane. I can't say the exact location because that's a bit confidential. It was around near the Logan area for those of you that know. And this was a painting package.
So we got three subbies lined up. I got quotes. I asked about five different painting subbies for quotes for reference. Then we got the three best ones put into a spreadsheet to the comparison and all that. Here's exactly how I screwed down this painting subbie to make 13 grand. The negotiation tactic. You know typically at tender time because you know there's three subbies in the running for it.
It's very easy for the builder to hold the cards and hold the leverage over you and simply give you one phone call and say hey the subbies come in five grand less than you. Can you match that price even if it's not true. And it very regularly in this industry because there's nothing for you to verify that against. If it's not true. What I learned at the time my job was to be a CA a contract administrator a very competent one that would make the builder the most money as possible.
Ideally without screwing someone down. But if I had to negotiate and say something like that make the most money on the project as possible. I would. Young CA me did that at the time. I think nowadays seeing I'm very subby advocate type. I wouldn't do it if I was on the builder side. Be a confliction. I would never be in that position these days. Because I value honesty and integrity and I wouldn't lie to a subbie just to get a better price of them.
Here's the thing. It's a very common tactic for a builder to simply tell you hey mate. So for example this painting subbie was at about I think it was 75 grand 76 grand that he had quoted for. Had other subbies their price wasn't as good. We had a budget of I think it was like or 70 grand I wanted to get him under budget so that can make more money.
That's simple. Less risk for us. If there's variations we've got price in the budget for that. His quote was around 75 to 76k memory by the way. I apologise I can't give you fixed figures. You'll just have to trust me on that one. Had to him down to about 63k. I believe that's what my project manager wanted at the time. So I'm like I'm keen for this challenge.
Let's do this. Up the subbie. I'm like hey mate. Really want to go with you for this project. But your price is a bit too high. Do you think we can meet around the 60k mark? He's like oh it's a bit much like I'll have to have a look at it. He goes away. He comes back to me and he says he can do it for 63k.
Budget was 68k. Probably about 70k. So just from that phone call alone I shaved about 13 grand or whatever the number is of his quote. Just like that. So please be wary out there. There are project managers in positions who will either A just straight up lie to you to get you to sharpen your pencil. Get your price down. Or B Yeah so that lie can come in the form of them just telling you the budget's lower than it really is.
Just so you can match it. Or B saying another subbie is cheaper than you. They want to go with you. Here's the thing. Here's the thing to keep in mind. If they are calling you. Is very likely that you are in the running. They don't have the time. Project managers and CAs are busy people. They don't have the time to make that call to each subbie. Will be dressed up differently depending on what phase of the tender process you are in.
But if they are genuinely saying a call like that example that I had. Be wary of that you are very likely the first in the running. And that's an occasion where they are likely just getting you to get the best price off of you. If that makes sense. One thing to be wary of is that if they do call you up asking for a best and final offer.
And call or their email isn't very personalized to you. That's likely a blanket email they sent to all subbies. So everyone is sort of in the running out of those subbies that are quoting for it. I hope that helps. If you need to know any other advice. Just get in contact with me. LinkedIn, Instagram, whatever it happens. It happens to be, email if you can find that somewhere, all the best.
There's plenty of tools down below in the description for you to use free, no account. And that's what I'm doing. I was builder side, subbie side as a CA over the last four years. I'm now director of the construction contracts co. And after watching all these subbies get screwed down, I'm simply putting my foot down and helping you run better projects and help your business be more commercial.
I guess make more money and not go under. So that. Thanks for watching. I'll see you on the next one.
General information about Australian subcontracts, not legal advice. Get advice on your own contract and facts.