The High Cost of Choosing the Lowest Bid

Often homeowners, commercial property owners, municipalities and sometimes even professional property management companies choose the lowest bid. This practice can end up costing more, before the job is complete as well as long term. Most professional property management companies follow the basic guidelines of obtaining the proper documentation before accepting a bid from a contractor. The usual documentation consists of; proof of sufficient liability insurance, proof of workmen’s compensation insurance and a W-9. Many of the other groups mentioned above may neglect to use resources such as the Better Business Bureau, personal references and online reviews. I’ll explain why failure to do your due diligence can cost you more than you think.

Homeowner’s violate these safe practices more than any other group. Many look at the bottom line and are seduced into thinking they are getting a bargain. These are some of the perils of taking the bait and some additional things to look for and questions to ask. All commercial grade asphalt sealer comes in a concentrated form from the manufacturer. The manufacturer provides strict guidelines for the mixture that is eventually applied to your pavement. The components of the mixture consist of water, performance additives such as latex and silica sand. A typical recommended amount of water to be added is between 25 to 30 percent depending on factors such as the solids content of the product, the additives used and humidity. There is no way to know if the contractor added 25 percent water or 100 percent water. There are chemicals that can very inexpensively manipulate viscosity. Over diluting the product will result in less solids being left on your pavement after the water dissipates and the product cures resulting in premature wear. Under diluting the product can result in the product not curing properly and tracking tar into your home or business. Additives are expensive and many contractors forego them completely. The benefits of latex additives are; accelerated drying time, a harder, blacker finish and aiding in suspending the silica sand in the sealer. If the sand is not distributed evenly throughout the final film left on your pavement it will cause premature failure. The benefits of silica sand when properly mixed are a harder, longer lasting film as well as providing a less slippery surface. If someone slips and falls on your pavement you as well as the contractor can be held liable. This brings us to the next problem with choosing the lowest bid: Insurance.

Fly by night contractors have been around forever. Some things to look for are out of state license plates, toll free telephone numbers with no local area code. Magnetic signs that can easily be changed to the “area” they are working or more precisely “hustling”. The old “we have some additional material left over and can offer you a great deal”. No reputable asphalt contractor ever has left over material. The cost of asphalt has soared with the cost of petroleum. Reputable paving companies rarely miscalculate the amount of material needed to complete a project. If they do it certainly isn’t enough to do even a tiny driveway. Reputable sealcoater’s have round tanks with a hydraulic agitation system. Avoid any sealcoat company or individual with a square tank because proper agitation which is essential is impossible with a square tank. Properly agitated sealer will last virtually forever unless it freezes. So no reputable sealcoating contractor has “left over material” with the exception of late fall when a freeze can ruin the product. These scam artists do not carry liability insurance or workmen’s compensation insurance. If a hose breaks and sealer covers your home, your automobile or your concrete, you are left holding the bag so to speak. If a worker is injured or a freak accident causes death on your property and the contractor does not carry workmen’s compensation insurance you could lose everything. That small amount of money you thought you were saving just caused you to enter “The Twilight Zone”. Do you really believe these guys have insurance or are concerned about the quality of the product being sold?

When the economy took a free fall there were and still are people who got into the asphalt maintenance business as a way to feed their family. Their theory was a cheap pickup truck or van, a plastic tank and a couple of brushes and bingo…I’m in the asphalt maintenance business! Without the cost of the proper knowledge of application procedures, proper equipment, liability insurance and workmen’s compensation insurance even the well meaning guy trying to feed his family can cause you the same grief as a con artist. Well meaning or not if / when something goes wrong again you are the one holding the proverbial bag. This brings us to the next topic: Experience. How long has the company been in business? Verify this with as many sources as possible. The internet hold a wealth of information and a little time spent doing research can pay off tremendously. These guys typically can provide you with local references; usually people who may not know a good job from a bad one but they know they saved a couple of bucks. The whole concept of insurance is sooner or later something is going to go wrong. That’s why it’s against the law to drive a car without it.

In conclusion, I remember my dad, the founder of Jet-Seal back in 1958, often reciting a quote. I’m not sure if this was his insight or if he borrowed it from some other wise person. The quote was, “Services are like oats, you can buy them a lot cheaper if they’ve been through the horse first”. Many people see the value in paying more for a better meal, a quality home or vehicle, clothing and many other products. They know from experience that usually paying a little more for a quality product costs less over time. Asphalt maintenance is no different. If you have any questions or concerns about a project you are considering please don’t hesitate to contact me. I have over 40 years of experience in this industry and I enjoy sharing the knowledge that I have acquired over the years. Warm regards,

~Ted Lovell

“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey. It’s unwise to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you may lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better.”

~ John Ruskin