- 6 - preliminary cost estimate. The developer would use the preliminary estimate to develop a budget on a project. In essence, Ginger served as consultant to the residential developer, providing information such as the type of products the developer should use or a cost-saving approach to a problem. When the preliminary work was finished and the job was set to go forward, the residential developer would want petitioner to get the job because Ginger already was familiar with it. As a result, the residential developer would be more lenient with petitioner in the bidding process than might otherwise be the case. This proved crucial to petitioner's success because it gave Ginger the opportunity to negotiate a final bid with the developer. This was not standard practice in the industry. Typically, the subcontractor submitting the lowest bid would get the job, but petitioner generally was not the lowest bidder. In fact, Ginger did not want petitioner to be the lowest bidder. Because of Ginger's good working relationship with the developers, they were willing to pay petitioner a premium since they trusted that Ginger would deliver superior quality and service. Ginger considered this a key to petitioner's success. Once petitioner began working with the large developers, Ginger took advantage of economies of scale and negotiated excellent terms on the purchase of materials. Petitioner grew and developed a backlog of pending projects equal to 3-5 months of work. The backlog helped petitioner retain quality workersPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011