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Anything wrong with this quote?

Anything wrong with this quote?

(OP)
I gave my first quote to the client subsequent to my first post regarding the pre tensioned concrete slab thread. He never did give me his budget and told me he is using his line of credit to make his com room.

I'm new at quoting and this would be my second customer, so I want to be as fair as possible. I'm giving him the material at cost.

This is what I quoted him for three different price points depending on the cable:

Cat5E Quote 1

2,788' Belden Cat5E FT6 Plenum rated blue @.54/ft     $1,505.52
(2) 10'x 12" mesh tray                                $168                                                  
(4) 10'x 6" mesh tray                          $260
(78) Belden cat5e MDVO jacks                           $464
(14) 2-port surface box                      $45.22
(4) Cat5e loaded 24 port panel                 $602.64

Material: $3,305.38
Labor:        $3,600
Total-------------------
        $6,645.38

Cat5E Quote 2

2,788' Essex Cat5e FT6 Plenum rated blue @.20/ft     $557.60
(2) 10'x 12" mesh tray                    $168
(4) 10'x 6" Ladder tray                       $260
(78) Belden cat5e MDVO jacks                         $464
(14) 2port surface box                    $45.22
(4) Cat5E Loaded 24 port panel                $602.64

Material: $2,357.46
Labor:        $3,600
Total-----------------
   $5,697.46

Cat6 Quote
 
3000' CAT6 FT6 Plenum rated                 $3,469.11
(2) 10'x 12" mesh tray                    $168
(4) 10'x 6" mesh tray                           $260
(78) cat6 jacks                             $565.50
(14) 2port surface box                    $45.22
(4) Cat5E  Loaded 24 port panel                $908.76

Material: $5,416.59
Labor:     $3,600
Total-----------------
          $9,276.59

He told me his "partners" are "put off" by the numbers. I discounted 15% on the labor and his partners are still "put off" by the numbers. I'm wondering if I'm wasting my time. He still needs an electrician to power 18 cabinets, dry wall etc...

Concern is if he can even pay me and if I am way out there with my quote.

Suggestions?

RE: Anything wrong with this quote?

2
Since this is only a *SECOND* quote, I'll help you out.  Walk, no RUN AWAY.  First of all, giving someone something "at cost" is never a good idea.  Now he is "put off" over the labor on top of that?  WTF do you have left to sell?

Go back, mark everything up and put in front of him.  If he asks, tell him that the "at cost" bid went away.  Then you sit back and wait.  In fact, add extra, that way, if you get the bid, you'll be happy because you made extra money.

Now you've learned the lesson.  It's better to not work than give away your talents.

LkEErie  

RE: Anything wrong with this quote?

If you're supplying materials at cost and the customer is shying away, you're likely wasting your time as you haven't gotten to the decision makers.  Either they have no idea what things cost or they know that this is a big project for you to take on as your second project.  

Also - I can't imagine cabling, installing, testing and labeling 78 cable drops for $3600 in labor.  

Mike
 

RE: Anything wrong with this quote?

(OP)
Thanks guys. I have a feeling he's trying to chisel me because I'm new to starting my own. The guy wanted to use a bunch of old loaded panels with labels clearly saying DEAD on some of the jacks for a communication center. I advised that would be a bad idea.

I eventually told him to come back with an offer because I too have a partner. And to think I was about to drop to 20% off. Not to mention the pre tensioned concrete slabs to deal with.

I think I'll run.

RE: Anything wrong with this quote?

(OP)
BTW, how much do you typically mark up material?

RE: Anything wrong with this quote?

Just like fish, it's "market price".  The first thing that makes me nervous is your 78 drops using less than 3K feet of cable.  5e plenum is running about $240/1000 as of last Monday.  In my world, you start with 16' of cable just going up the wall and back down to the rack.  Are you thinking that (just for math's sake) 80x16 is 1280 feet and you're going to spin each run at an average of 30 feet?  It's your bid, but what happens when your 3 boxes of cable runs out?  Do you get to eat the other 4 boxes you have to buy to fulfill the bid?

In our area, a Cat3 jack is $4, a 5e $5.50 and a 6 is $7, that's the JACK, the housing is extra.  What's the markup?  Who cares.  BTW those 7-8 boxes of cable start at $300/full box.  I get to keep the surplus.  Likewise the patch panels start at $4/port for the panel only(5e).

It used to be, we priced a port in the station end at $8-10 and added our patch panel and cable costs to that.  And, on the subject of labor, pretend you can terminate 6 cables an hour.  Without running, identifying or troubleshooting, it looks like you have 26 hours just in termination time.  Add the 39 hours to run the cables at 30 minutes per and you still have to build the tray, mount the racks etc. etc.  How many hours did you have in your budget?

LkEErie

 

RE: Anything wrong with this quote?

(OP)
I estimated 40 hours for everything. 17 hours to pull the cable because I would be pulling three at a time at 40 minutes per. Other than that, your estimate of the time involved is pretty close to mine. I'm off by three hours. I also estimated 5 hours for the tray even though I have never done one. However, I forgot to factor in terminating on the patch panel end.

Overall, this guy would have gotten a deal of the century with that mess up of mine.

 

RE: Anything wrong with this quote?

4
A few other lessons learned:

As soon as you pull a cable or attach even one bolt of the racking, you have converted your "shop stock" into building fixtures.  This matters to you because at that instant, a legal "wrangle" has happened, however subtly.  The bank or financial institution that holds his "line of credit" has likely executed a general secured interest in all chattels, furniture, inventory, accounts receivable and fixtures owned by the building occupant (whether renting or owning).  The upshot of that is, if the client fails to pay your bill, you are an unsecured creditor.  If the client also fails to pay their line of credit, the bank or financier will have the option to seize and sell off your installation without having to pay you, as they have the secured interest in the fixtures and you converted your shop stock to fixtures (and gave up your secured interest in them) by attaching them to the building.

You could still sue, but that can be time consuming and expensive.  If the client goes into bankruptcy, you can get in line as an unsecured creditor, but you will get cents on the dollar, if anything.  

You can check on some of this for free by going to your Corporations division at the Secretary of State's office and looking up all UCC (Uniform Commercial Code) filings for your potential client.  If you see a UCC filing for security interest or collateral or similar asset pledges, know what your elevated risk is.

You did not mention if you were going for a deposit or not.  For new clients who have no proven credit with you or no referral from one of your good clients, you should require a deposit as soon as your land your shop stock on their premises.

In addition, you should have language in your contract to establish what assets are assigned to your assurance of payment, and then be sure the assets have not been promised to any other vendor.  For example, in this case, IF I were to do business with this client (for the record, I agree this is one to run, don't walk, away from) I would go to the bank holding the line of credit and get an assignment from them for the contract price, meaning that it will work like an escrow, the bank puts a freeze on the amount of your contract in the line of credit and promises to pay you directly if you fulfill the contract successfully.  

Remember, if you do all this work and front the money for the equipment, and the client fails to pay you and you have nothing more than an un-secured promise to pay, you are pooched.

In the real world, a legitimate customer will not balk at reasonable assurances of payment.  They want protections to ensure you do the job right and finish on time.  You want to be paid for your earnest good work.  Legitimate businesses accept this.

It is tempting to let a customer beat you up on price when you are starting out because you are hungry for business, they know it, and hard ball is hard ball.  However, when you are starting out, you have less capital to back your business and a default non-payer can seriously damage your business and trash your cash flow, causing you in turn to late pay your vendors or otherwise hurt you.

I am not a lawyer, so I cannot give legal advice.  As someone who has had his share of hardknocks lessons, though, I will say I agree with all those who told you to dump this project and to keep your margins intact.  I also suggest you do some contract law and Uniform Commercial Code studying, because that can save you a lot of grief and money down the road if something does go wrong.

PS:  Drilling into pre-stressed slabs with cable tension members is something I would not do without an engineers review.  Aside from your install maybe not having enough grip, imagine if you compromise a cable by hitting it with a drill bit or you broach a cable chamber and allow moisture to enter, so the building inspector fails or faults the structure.  Imagine the repair bill you will foot to replace the affected slabs.

RE: Anything wrong with this quote?

(OP)
Wow, that was great advice. I'll look into those things you suggested. As for the slabs, I have already researched those and decided I wouldn't have attempted them. He would have to take care of that.

RE: Anything wrong with this quote?

"I'm wondering if I'm wasting my time."

Yes.


"Concern is if he can even pay me"

NEVER work for someone that you don't think will pay. Even if you get funds in advance something bad WILL end up happening.


"if I am way out there with my quote."

Yes, your quotes are too low.

RE: Anything wrong with this quote?

The first red flag should've been that he wanted to re-use materials that were obviously damaged.  I have learned that, even though I really could use the money, some jobs just aren't worth it.  I have spent far too much time feeling sorry for customers and undercutting myself.  When I had enough of being Robin Hood, I raised my rate and became steadfast in my policies.  To my amazement I became busier with more 'quality' customers and jobs.  I still do favors for some of the old clients, because they got me here.  Those people still need their niche filled, but you have to draw the line somewhere.  I just couldn't afford to keep spinning my wheels and going nowhere; tires are expensive!

RE: Anything wrong with this quote?

Hope the guy you are bidding against doesn't post here !
 

RE: Anything wrong with this quote?

(OP)
So what numbers would you all come back at?

RE: Anything wrong with this quote?

That would be an exercixe in stupidity.  I didn't survey the job and I'm not the one looking at a floor plan.  I'm still having a hard time swallowing the fact that you're only going to use less tna 40 feet per run.  Signt unseen, I'd bid 100 feet per run, about $5 per port on the patch panels, Plenum cable at 40 cents per foot, and each hole at some rate.  If there are 78 holes, then it would be $8.  The frame and racks are an add-in and the labor is a minimum of 1 hour per run for running, terminating, and minimal testing.  Certification is extra.  Our discrepancy is I would look closely at the floor plan and bid 8 full boxes in the quote.

LkEErie
 

RE: Anything wrong with this quote?

Just a comment on the pre-stressed cable floors: The floors should have marks on them showing the approximate location of the cables. However you're taking a huge risk if you decide to just rely on them. I would never drill into a floor like this w/o having it X-rayed first so you know the exact location of the cables.

I knew a guy who cut a cable, when it let go it blew out the side of the biulding and cost him over 20 thousand to have it repaired. It's those kind of claims that really raise your insurance rates.


  

RE: Anything wrong with this quote?

(OP)
I've got a new offer to quote today. A simple rough in of 3 pos data, one office data, and one voice. This is coming from an electrical contractor bidding on the job, so I would be subbing.

Dimensions are 53' x 15' Straight run from back to front for the POS through t-bar ceiling. data and voice for the office is right at the back. I'm thinking:
 $90 per run
 229' @ .40 = 91.60
(3)2 port surface box = $15
(5) MDVO jacks = $30
(2) 2 port face plates = $6

total $577.60 so round it up to $600.
Thoughts?

RE: Anything wrong with this quote?

Just looking at your runs, commercial space so figure 20' rise, 55'+ 20'up + 20'down = 95'. So figure about 300' just for the 3 POS at front of store, then another 120' for office, so 1/2 box of cable @ $0.15/ft is about $75 for Cat5E.  Three runs at front is one pull, two runs at back is one pull, about 3 hours. So not counting the hardware and devices, @$75/hr that's $300.  Don't worry about exact lengths, just generalize.  I think $600 is fair, but don't forget that the electrical is also going to mark it up.  Get some profit, and allow your contractor to get some profit and you will have a good relationship.

RE: Anything wrong with this quote?

(OP)
Havonasun, thanks. Pretty much on the button for what I was thinking regarding time.   

RE: Anything wrong with this quote?

Just  a quick note, I have seen how helpful this forum is to all contributors and newbies alike, thats what makes it the defacto forum around. Everyone has been so helpful, and with good honest personal advice, something that is priceless.

Like one big happy family, if only the whole world could take an example from the ethics and morals of these forums, what a wonderful place it would be.

Makes good reading too, thanks to everyone.  

Many Thanks
Yurov Ardyy

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